How to Become Better at Taking Risks
An engineer, a economist and an insurer walk into a bar and start discussing how to help people understand risk. The result?
Ok, it wasn‘t a bar, it was a nice steakhouse in Washington D.C., and the insurer wasn‘t a separate person but rather the insurance mindset that has rubbed off on Mark and myself after embarrassingly many joint years working in and for the insurance industry, and on topics of risk. But still.
Over those many years, it's become apparent that risk is a topic that is not commonly understood. Insurance has several technical definitions in the space, but we noticed when we talked to colleagues in the financial markets and the banking world, they meant different things by "risk". Insurers think underwriting and rating; bankers think counterparty and default; market traders think alpha and risk-adjusted returns. Never mind what engineers think, etc etc. You get the idea.
On the other hand, non-specialists think more in terms of chance, gambling, and entrepreneurship. Maybe what comes to mind is the classic military board game that taught many of us the location of Kamchatka.
So in this blog, we will talk about risk. Not as academics, or from the vantage point of any particular industry, although that will all have its place. We want to tell stories about risk, and educate ourselves and others on how risk impacts human decision-making, well-being, and society.
Our internet-based, socially-connected and mobile age has driven enormous change in how we shop, work, communicate and play, and in our social, political and economic systems. These all impact each of us in myriad ways both good and bad. Our reactions to change, however, have not kept up. Human beings are poor risk estimators and make bad decisions with alarming frequency. We believe understanding the dynamics of risk, and applying them to personal decisions, may lead to better outcomes for all.
We believe there is value in a broader view outside of insurance or finance or technology. Accordingly we can bring some broad experience to the table: strong technology grounding, work projects in over 50 countries, and an eclectic mix of past jobs and connections.
So in the coming months, look for essays, interviews, maybe a survey or two. Due to our different backgrounds – geography, education, political orientation – we will come at risk from different angles, and maybe sometimes even with contradictory viewpoints.
But that’s fine, because we also hope to expand our views on risk by building a dialogue with many perspectives on this topic. We are opening comments on this blog with this in mind, and have several projects underway to generate that dialogue.
Can you have fun thinking and reading about risk? We certainly do and hope so will you. We plan to publish new posts on Tuesdays and Friday.
Mark and Christian