SAV Bahnhofskolloquium | How Societies Manage Risk - The Big Picture of (Re)Insurance, and Beyond
Modern society mitigates and transfers risks in a variety of ways, which range from catastrophe prevention and (re)insurance solutions through to injustices of a minor and inconspicuous nature.
We illustrate that the measures taken depend on the uncertainty about the risks in question, and involve three trade-offs:
- innovation vs. risk avoidance;
- liability vs. collective risk sharing;
- equity vs. practicable claims settlement.
We study two highly instructive examples (nuclear liability and the measures taken in the wake of the 9/11 terrorist attack) and discuss the insurability of systemic risks like a pandemic.