Lloyd’s Sponsored Report Faults Risk-Averse Culture

June 19, 2002

A major study by U.K. think-tank Global Futures, sponsored by Lloyd’s of London and the Association of Insurance and Risk Managers (AIRMIC), suggests that following the Sept. 11 attacks a “risk-averse” culture has developed that is stifling the aspirations of business and diminishing society’s capacity to respond to adversity.

The basic finding was that since the attacks a belief has been growing in business, including the insurance industry, that “so-called ‘intentional’ risks — including the threats posed by terrorism — are uninsurable,” and concludes that this is “a recipe for paralysis and is creating a dangerous risk-averse culture.”

Speaking at the AIRMIC Conference at the International Convention Centre in Birmingham, Professor Frank Furedi, of the University of Kent, argued that the risk-averse culture is dangerous, and that it is better for the insurance industry to treat some aspects of September 11 as a normal, insurable event and discourage society’s preoccupation with the idea that it is exceptionally vulnerable.

Risks, Furedi pointed out, “have traditionally been understood as the unintended product of human interaction with the world. But the attacks on the World Trade Centre have heightened the spectre of ‘intentional risk,’ leading societies to adopt a vulnerability-led response.”

The tendency to try to limit risks not only adversely affects many aspects of modern life, but also may actually increase the threat from Terrorists, and from bomb threats and hoaxes, as society is likely to pay more attention to them, thus giving their activities greater effect than would ordinarily be the case.

The report suggests that since last September an ever-growing part of social and business life has been reorganized around a heightened sense of security consciousness. It cites such examples as, “Travel security measures; increased building security; mail delivery and security; protection of records and data, and activity dispersal by companies.”

“The problem with these developments,” said Lloyd’s announcement, “is that they are a reaction that may be unjustified.” Furedi pointed out that “Security management services exaggerate risks that accord with their specialisms. Political lobbyists inevitably put forward one-sided cases. All kinds of agendas are being pursued under the guise of a response to September 11.”

Julian James, Lloyd’s Director of Worldwide Markets, commenting on the study stated that, “This is a bold and worthwhile project that is setting out to ask fundamental questions about the way in which society has responded to September 11. It will also consider the broader issue of how society and commerce in these formative years of the 21st century relates to the concept of risk. As an international insurer, we believe this project has the potential to be invaluable to our business; as members of society, we believe it could shed light on attitudes that will shape our lives for years to come.”

A copy of the report is available on the Global Futures website at: www.futureproof.org .

Was this article valuable?

Here are more articles you may enjoy.