Risk Ventures

Allanz’s print ad, “Financial Solutions from A – Z” 

Annuities in Boston? Construction in Dubai? Equity fund in Frankfurt? Gain sharing in Houston? Investing in Jaipur? Knock-out option in New Delhi? Office space in Pittsburgh? Quick selling in Rome? Samurai bond in Tokyo? Upsiding in Vancouver? Windfall tax in Xuzhou? Yield curve risk in Zurich? 

September 6, Insurance broker Marsh & McLennan launched a new non-profit group called group called the Marsh Center for Risk Insights in order to educate business leaders about risks that can threaten their business.  

Headline: “Fortune 1000 Companies Making Limited Preparations for Risk.”

Highlights of the findings include: *A lack of access to fresh water would have catastrophic affects on nearly 50% of the businesses surveyed. However, few businesses have taken steps to prepare for a water shortage. *Half of senior executives surveyed do not believe it’s likely global climate change will result in long-term environmental and economic impacts. *Less than one-third of the respondents see a pandemic disease outbreak with a high worldwide mortality rate as having a severe impact on their business. 

Its initial report is based on a survey of 101 executives and managers from Fortune 1000 companies on their perceptions of the biggest risks their companies face. The top risks executives said they are worried about are such natural disasters as earthquakes, hurricanes and floods, along with terrorist attacks, rising oil prices, and global climate change. More than 90% said their companies have taken some steps to prepare for one or more of the crisis situations.

Type T Behavior: Thrill Seekers Article highlights by David Crary from Associated Press, September 8, 2007, “Risk-Takers: What Makes Them Tick?”

Temple University psychologist Frank Farley is a past president of the American Psychological Association who has extensively studied risk-taking. He says it is an aspect of human nature with both positive and negative sides. For example, he said a significant amount of crime is motivated by thrill-seeking impulses. “Often the people who are not the thrill seekers look at that behavior and say, ‘They’re crazy,’” Farley added. “In fact, it’s the impulse that created the modern world — it’s the force of inventiveness, creativity, individuality, change and survival.” 

Farley says researchers who categorize people at Type A or Type B personalities should add a third category — Type T — for thrill-seekers. Many psychologists have linked contemporary risk-taking to patterns of social change. Those who perceive today’s world as too predictable and safe may be tempted to seek an outlet in the form of extreme sports such as parachuting off cliffs or snowmobiling on avalanche-prone mountainsides. Others take risks in a quest to set records — to be the youngest, oldest or first of a certain category to accomplish a particular feat, such as circumnavigating the globe alone. 

“In our modern world, we’ve eliminated a lot of risks and threats that our ancestors faced,” said Daniel Kruger, a research scientist at the University of Michigan’s School of Public Health. “People might seek these thrills because their current environment is so safe it’s not giving them the same stimulation.” 

Both Kruger and Farley suggested that risk-taking, in its positive form, can correlate with business and financial success. Recalling a talk with Fossett about adventuring, Dunn summarized his friend’s attitude: “If you do these kinds of things and you do them well, it’s the same sort of philosophy you need to succeed in business or to succeed in life or to succeed in marriage or to succeed in anything, because you have the tenacity and you have the focus and you have the direction to do that.”