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"We are in danger of having a wholly disproportionate attitude to the risks we should expect to run as a normal part of life."
Tony Blair, 2005
There's too much CRAP in the risk management field today, according to a theorist on risks and risk compensation.
CRAP, or Compulsive Risk Assessment Psychosis, is the term that John Adams, a professor at University College in London (www.john-adams.co.uk), applies to the increasing demand for an assessment of every possible risk, no matter how slight. This "disorder" causes society to try to analyze all potential hazards, even in the absence of wide agreement what the risk is and how it should be controlled, he said.
Regulators and risk managers are on solid ground when they are asked to devise strategies to control risks for which there is widely agreed upon evidence of likely outcomes. These include risks that are perceived directly, such as the risks of climbing a tree, and risks that are perceived with science, such as the risk of cholera bacteria in a water supply.
Things get on less solid footing, Mr. Adams contends, when risk managers are asked to extend their oversight to what he calls "virtual risks," which are merely "imaginable possibilities" for a given situation but for which there is insufficient evidence to say with certainty what might occur. Management of such risks is often based on emotion or superstition. Examples of this include reactions to global warming, radiation from mobile phones, passive smoking and other situations where science can't agree on the risks.
Without common sense, or reliable evidence, control of virtual risks takes such forms as extreme risk avoidance or blanket warnings to avoid all possible risks, no matter how unlikely. And when this happens, Mr. Adams contends, the result is CRAP.
Speaking at the annual Assn. of Insurance & Risk Managers conference in London earlier this month, Mr. Adams offered several graphic examples of this disorder:
Mr. Adams said risk managers often feel compelled to conduct risk assessments to "ward off lawyers." This analysis drew chuckles from many risk managers in attendance. With the benefit of hindsight, Mr. Adams said, a ruthless attorney can transform the adverse outcome of a decision to take a risk into an act of negligence.
I believe this cover-your-backside approach results in another disorder: Dysfunctional Assessment of Flagrant Threats, or DAFT. This disorder manifests thusly: As some risk managers attempt to assess possible risks, and cover all surfaces in their control with warnings, some people become dependent on those warnings and relax their own vigilance. As a result, these people reason that in the absence of flashing lights, barriers and safety cones, a condition of safety must exist, relieving them of the need to make their own evaluation of potential risks and respond accordingly.
Unfortunately, our culture has become too accepting of these disorders and they are likely to spread. Of course, that's just my best guess.