Year of Humanitarian Engineering
Understanding Insurance: The Importance of Engineering Risk Analysis
Outline
Introduction
Characterising Risk
Risk Management Strategies
Alternative Strategies
Practical Impacts of Varying Risk Management Strategies Closing Remarks
Introduction
Recent events
Expectations
Infrastructure limitations
Constraints, limitations, and boundaries
Characterising Risk
The term 'risk' −
the uncertainty of an outcome of an event
(ISO 31000:2009)
Pure risk
Speculative risk
Perspective
Risk management
Risk Management Strategies (1)
Strategy −
the bridge between policies and objectives
−
ways, means, and ends
Use of the term 'strategy'
Risk management strategies −
Avoidance
−
Retention
−
Non-insurance transfer
−
Loss control
−
Insurance
Risk Management Strategies (2)
Insurability −
Strategy
Large number of homoegenous exposure units
Accidental and unintentional
Determinable and measureable
Not catastrophic
Calculable chance of loss
Economically feasible premium
Alternative Strategies (1)
State (or nationalised) insurance −
Tax based
−
Conflict with 'free market'
−
Perspectives
−
Politicians
Property developers
Insurance companies
Safety culture and continuous improvement
Alternative Strategies (2)
Voluntary donations −
Driving factors for contributions
−
Subsidising others
−
Safety culture and continuous improvement
Practical Impacts of Varying Risk Management Strategies
Planning and preparation −
Complexity
−
Disparate inputs
−
Tension between pure and speculative
−
Rhetoric
−
Legislation and regulation
Closing Remarks (1)
Managing risk is not simple Risk management strategies require multiple inputs that may conflict
Challenges of engaging stakeholders
Selling the cost to society
Continuous improvement and safety culture
Closing Remarks (2)
Engineers must: −
articulate risk
−
understand first, second, and third order effects
−
engage with society on safety culture and continuous improvement
−
remain a competitive, but not adversarial, profession
−
ask 'so what' and then act