Do You See the World as Increasingly More Risky or Increasingly More Safe?
Aug. 17, 2011
Is the world becoming more risky than it has ever been? On the one hand . . . It's only August, and analysts already have concluded that natural hazards have been more costly to the world economy in 2011 than in any other year on record. Researchers ...
Is the world becoming more risky than it has ever been?
On the one hand . . .
It's only August, and analysts already have concluded that natural hazards have been more costly to the world economy in 2011 than in any other year on record. Researchers estimate that the tsunami in Japan, tornadoes in the US, the Christchurch earthquake and flooding in Australia all have contributed to a massive $265 billion and that's for just the first six months of the year.
In addition to natural hazards, cyberattacks are on the rise. Counterfeiting continues to flourish. Terrorism remains a significant threat. Do I even need to mention the wild swings on Wall Street? The list of risks goes on and on.
But, on the other hand . . .
Some may argue that there's actually less risk than before. After all, risk managers are growing increasingly sophisticated about measuring and mitigating threats. And, there are other significant reasons for optimism. Both men and women in the US are living longer. Violent crime is down. The number of US property crimes has decreased, and motor vehicle fatalities have fallen, too. (See infographic here.)
So, which is it? Do you think the world is becoming more risky, or less?
It's certainly an interesting question, and before you answer, you may want to see what other industry leaders have to say.
National Underwriter recently asked more than 30 of the industry's top leadersand politicians, a futurist and Ken Feinberg, as wellto weigh in with their considerable expertise and experience.
Plenty said they thought the world is becoming safer. But, even more felt it's becoming more risky. According to National Underwriter P&C, reasons for their pessimism included: "Global warming and global supply chains. Terrorism and political instability. Scarcer resources and all the scary scenarios that implies. A greater concentration of property in flood- and hurricane-prone coastal areas. And the ability of the Internet to ruin a brand's reputation in a day, an hour, minutes."
I'm sure it won't surprise you to learn that I fall in the "riskier" camp. Put simply, globalization has fundamentally changed supply chains, created unprecedented business opportunity and unprecedented levels of risk, as well.
