Risk managers will be urged to brush up on their Shakespeare to discover the true nature of risk, when leading US investment and management consultant Peter L Bernstein addresses AIRMIC’s annual conference on June 6. The author of eight highly acclaimed books, including Against the Gods will use the proximity of the conference’s Birmingham location to Stratford-upon-Avon to suggest that Shakespeare has a powerful message.
Bernstein contends that managers of risk have designed an impressive array of weapons to bring risk under control, but have spent too little time asking themselves about its fundamental nature. He believes the study of Shakespeare will help deliver “an unforgettable insight into the nature of risk and the theory of decision-making under conditions of uncertainty.
“Although progress in weapon design has been impressive,” says Bernstein, “it has come at a cost. We spend too little time asking ourselves what the animal is - what motivates it, feeds it and keeps it so elusive.
Bernstein will use Shakespeare’s work and that of another leading figure of the past, whom he describes as a “celebrated contributor to risk theory,” to illustrate the truth about how decisions are made in the face of an unknown future. “Armed with the wisdom of these two great men, we will proceed to dig down to another layer in the nature of risk, a layer that will shed light on what the business of insurance is all about,” he says. “We shall find that insurance matters in more areas than those defined by the industry’s traditional boundaries. We can then understand the linkages between insurance and financial markets, which explain why insurance both can and must break out of the traditional boundaries.
