The Wharton Risk Center celebrated its 30th anniversary with a symposium on “The Future of Risk Management” at the Wharton School of the University of Pennsylvania on October 23, 2015. Celebrating 30 years gives us a unique opportunity to reflect on questions that remain unanswered such as improving risk communication, building public-private partnerships, financing catastrophe losses and developing long-term strategies for managing natural and man-made disasters.
Podcast at Knowledge@Wharton: What Have the Past 30 Years Taught Us About Managing Risk?
Please give us your thoughts on the Future of Risk Management.
The Honorable Michael Chertoff, Secretary, Department of Homeland Security, 2005-2009
Professor Klaus Schwab, Founder and Executive Chairman, World Economic Forum
(accepted by Jean-Paul Rosso, Vice Chairman)
The Travelers Companies, Inc. (accepted by Alan Schnitzer, Vice Chairman)
October 23, 2015
Symposium – The Future of Risk Management
Jon M. Huntsman Hall
3730 Walnut Street, 8th floor, Philadelphia, PA 19104
8:00 a.m. – 4:00 p.m.
Many accomplished friends of the Risk Center will participate in the Symposium. Our aim is to stimulate a lively discussion with everyone in the room. To this end, we have asked a few individuals to make introductory remarks to initiate the group discussion for each panel topic. We look forward to your active participation.
8:00 – 8:30 Continental Breakfast
8:30 – 9:00 Welcoming Remarks (University of Pennsylvania Provost Vince Price) and Introductions
9:00 – 10:15 Theme 1: Linking Intuitive and Deliberative Thinking
This session will highlight the role that behavioral biases, misperceptions of risk, and simplified decision rules play in how individuals deal with risk, and proposing tools and processes to aid decision making to encourage more systematic thinking in making choices under risk and uncertainty.
Remarks: Baruch Fischhoff (Carnegie Mellon University); Daniel Kahneman (Princeton University); Paul Slovic (University of Oregon); Elke Weber (Columbia University)
Moderator: Howard Kunreuther (Wharton School, University of Pennsylvania)
10:15 – 10:30 Break
10:30 – 11:45 Theme 2: Developing Implementable Long‐Term Strategies
This session will focus on strategies to overcome myopia and the status quo bias in dealing with decisions to undertake measures to reduce risk, for example, through the use of choice architecture.
Remarks: Eric Johnson (Columbia University); Roger Kasperson (Clark University); Granger Morgan (Carnegie Mellon University); Alex Wittenberg (Marsh & McLennan)
Moderator: Robert Meyer (Wharton School, University of Pennsylvania)
11:45 – 1:00 Lunch and Polling Game
1:00 – 2:15 Theme 3: Innovations in Risk Management
This session will explore new risk transfer products and market solutions for addressing challenges associated with current and emerging risks and the role that science and technology can play in better modeling these risks and developing strategies for reducing future losses and aiding recovery.
Remarks: Holly Bamford (NOAA); Robin Gregory (University of British Columbia); Joan Lamm-Tennant (Blue Marble Microinsurance); Robert Muir-Wood (Risk Management Solutions)
Moderator: Erwann Michel-Kerjan (Wharton School, University of Pennsylvania)
2:15 – 2:30 Break
2:30 – 3:45 Theme 4: Creative Public‐Private Partnerships
This session will focus on risk management strategies involving the public and private sectors for dealing with interdependent and potentially catastrophic risks, with policy tools ranging from risk communication to economic incentives, insurance and well-enforced standards and regulations.
Remarks: Cary Coglianese (University of Pennsylvania Law School); Alice Hill (White House); Dwight Jaffee (Haas School, UC Berkeley); Richard Zeckhauser (Harvard University)
Moderator: Howard Kunreuther (Wharton School, University of Pennsylvania)
3:45 – 4:00 Wrap up
W.J. Wouter Botzen: “Improving Individual Flood Preparedness through Insurance Incentives”
Cary Coglianese: “Getting the Blend Right: Public-Private Partnerships in Risk Management”
Robin Dillon: “Learning from All Types of Near-Misses”
Neil Doherty: “Cultural Factors in Risk Assessment”
Baruch Fischhoff: “I Can’t Turn It Off”
Christian Gollier: “Risk Management and Evaluation: The Role of Parameter Uncertainty”
Robin Gregory: “Improving Stakeholder Input on Upstream Risks”
Dwight Jaffee: “Insurance Risks and Government Interventions”
Robert W. Klein: “The Role of Government in Risk Management and Insurance”
Carolyn Kousky: “Threats to Insurability”
Howard Kunreuther: “The Role of Insurance in Risk Management for Natural Disasters: Back to the Future”
Craig Landry, Gregory Colson & Mona Ahmadiani: “Structured Empirical Analysis of Decisions under Natural Hazard Risk”
Erwann Michel-Kerjan: “Rethinking Government Disaster Relief in the U.S.: Evidence and a Way Forward”
Barbara Mellers, Phil Tetlock, et al.: “How Much Precision is Necessary in Probabilistic Expressions of Risk?”
Lisa Robinson, Kip Viscusi & Richard Zeckhauser: “Crying Wolf and Crying Rabbit and Other Consumer Warnings”
Paul Schoemaker: “Strategic Approaches to Managing Uncertainty”
Alex Wittenberg & Richard Smith-Bingham: “Anticipating Emerging Risks — A Blend of Creativity and Pragmatism“
Howard Kunreuther is the James G. Dinan Professor; Professor of Decision Sciences and Business and Public Policy at the Wharton School, and Co-Director of the Wharton Risk Management and Decision Processes Center. He has a long-standing interest in ways that society can better manage low-probability, high-consequence events related to technological and natural hazards. He is a Fellow of the American Association for the Advancement of Science and a Distinguished Fellow of the Society for Risk Analysis. He serves on the National Academy of Science / National Research Council’s panel on Increasing National Resilience to Hazards and Disasters, and as a Coordinating Lead Author for the Intergovernmental Panel on Climate Change (IPCC)’s 5th Assessment Report, Working Group 3, Chapter 2, “Integrated Risk and Uncertainty Assessment of Climate Change Response Policies.” Recent books include At War with the Weather (with Erwann Michel-Kerjan, MIT Press 2011) which received the Kulp-Wright award for the most influential book on risk management; and Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry (with Mark Pauly and Stacey McMorrow, Cambridge University Press, 2013), and Leadership Dispatches: Chile’s Extraordinary Comeback from Disaster (with Michael Useem and Erwann Michel-Kerjan. Stanford University Press, 2015).
Robert Meyer is the Frederick H. Ecker/MetLife Insurance Professor and Co-Director of Wharton’s Risk Management and Decision Processes Center. He is a noted scholar whose research focuses on consumer decision analysis, sales response modeling, and decision making under uncertainty. Professor Meyer’s work has appeared in a wide variety of professional journals and books, including the Journal of Consumer Research, the Journal of Marketing Research, the Journal of Risk and Uncertainty, Marketing Science, Management Science, and Risk Analysis. He is currently the editor-in-chief of the Journal of Marketing Research, and an associate editor for the Journal of Marketing. He has previously served as co-editor of Marketing Letters, and associate editor of the Journal of Consumer Research, JMR, and Marketing Science. He has also served on the editorial review board of several major journals.
Erwann Michel-Kerjan is Executive Director of the Wharton School’s Center for Risk Management and Decision Processes, and teaches in Wharton School’s graduate program. He is also Chairman of the OECD Secretary-General Board on Financial Management of Catastrophes, which advises its thirty-four OECD member countries on these issues. Dr. Michel-Kerjan was named a Young Global Leader (YGL) by the World Economic Forum (Davos), an honor bestowed to recognize and acknowledge the most extraordinary leaders of the world under the age of 40. He has worked extensively on improving financial protection solutions to extreme events, from natural disasters to terrorism, and how to strengthen resilience. He has testified before the U.S. Congress on these issues, recently addressed the G20 and currently advises several corporations, foundations and heads of state. Dr. Michel-Kerjan is the author of several acclaimed books, including, most recently, The Irrational Economist (PublicAffairs Books, with P. Slovic) and At War with the Weather (MIT Press, with H. Kunreuther) which received the prestigious Kulp-Wright award for the most influential book on risk management, and Leadership Dispatches: Chile’s Extraordinary Comeback from Disaster (with Michael Useem and Howard Kunreuther. Stanford University Press, 2015).
Please give us your thoughts on the future of risk management.