ENH

ANCI

NG

EN

HAN

CIN

G

RIS

K AW

AREN

ESS

AND

CAP

ABIL

ITY

RIS

K AW

AREN

ESS

AND

CAP

ABIL

ITY

Flor

e-A

nn

e M

essy

A

dmin

istr

ator

OEC

D F

inan

cial

Aff

airs

Div

isio

n

Con

fere

nce

of

the

OEC

D I

nte

rnat

ion

al N

etw

ork

on t

he

Man

agem

ent

of L

arge

-Sca

le C

atas

trop

hes

26

-27

Feb

ruar

y 2

00

7, H

yder

abad

WH

AT I

S “R

ISK”

?C

once

pt o

f ri

sk c

ombi

nes

ou

r u

nde

rsta

ndi

ng

of t

he

likel

ihoo

d of

a h

azar

dous

eve

ntoc

curr

ing,

w

ith

an

asse

ssm

ent

of

its

impa

ct.

Impa

ct

of

a h

azar

dou

s ev

ent

depe

nds

on

th

e el

emen

ts a

t ri

sk

-exp

osur

e-,

such

as

popu

lati

on

or

build

ings

, an

d th

eir

asso

ciat

ed

vuln

erab

ility

to

dam

age

or c

han

ge a

s a

resu

lt o

f th

e ev

ent.

Ris

k ca

n m

ean

dif

fere

nt

thin

gs

to d

iffe

ren

t pe

ople

OU

TLIN

EI.

Diff

icul

ties

in P

redi

ctin

g an

d As

sess

ing

Gro

win

g H

azar

d Ex

posu

rean

d Vu

lner

abili

ties

II.

Impo

rtan

ce o

f an

d Ch

alle

nges

in E

nhan

cing

Aw

aren

ess

on a

nd

Resp

onsi

vene

ss t

o Po

tent

ial I

mpa

cts

of L

arge

-Sca

le D

isas

ters

III.

Wha

t ca

n be

don

e?

-O

ECD

Goo

d Pr

actic

es f

or E

nhan

ced

Ris

k Aw

aren

ess

and

Educ

atio

n on

Ins

uran

ce I

ssue

s -

Inte

rnat

iona

l End

eavo

urs

to I

mpr

ove

Ris

k Aw

aren

ess

and

Lite

racy

IV.

Polic

y Co

nclu

sion

s an

d Fu

ture

OEC

D W

ork

on R

isk

Awar

enes

s

I.D

iffic

ultie

s in

Pre

dict

ing

and

Asse

ssin

g G

row

ing

Haz

ard

Expo

sure

and

Vul

nera

bilit

y to

La

rge-

Scal

e D

isas

ters

(1)

Emer

gen

ce o

f a

“ris

k so

ciet

y”:

Incr

easi

ng

freq

uen

cy a

nd

seve

rity

of

larg

e-sc

ale

risk

s

Mod

erni

zati

on a

nd g

loba

lizat

ion

tren

ds s

ugge

st a

n ex

pans

ion

and

incr

ease

d fr

eque

ncy

of a

wid

e ra

nge

of t

radi

tion

al a

nd e

mer

ging

di

sast

ers

wit

h po

tent

ially

dev

asta

ting

con

sequ

ence

s on

the

sm

ooth

fu

ncti

onin

g of

the

eco

nom

y, s

ocie

ty a

nd in

divi

dual

s’ w

ellb

eing

Mor

e se

vere

nat

ura

l cat

astr

oph

es a

nd

un

cert

ain

con

seq

uen

ces

of g

lob

al

war

min

g

Ind

ust

rial

an

d t

ech

nol

ogic

al d

isas

ters

Terr

oris

m a

ttac

ks o

n a

gre

ater

sca

le

Dem

ogra

phic

evo

luti

ons

Kn

own

an

d e

mer

gin

g p

ande

mic

s

(2)

Dif

ficu

ltie

s in

Ass

essi

ng

expo

sure

an

d vu

lner

abili

ty t

o h

azar

ds

On

a gl

obal

sca

le, a

sses

sing

ris

k ex

posu

re is

cha

lleng

ing

even

for

tech

nica

l exp

erts

Eval

uatin

g th

e pr

ecis

e pa

rtic

ular

con

sequ

ence

s/da

mag

es

pote

ntia

lly s

tem

min

g fr

om la

rge-

scal

e ris

ks is

eve

n m

ore

daun

ting

for

non

expe

rt h

ouse

hold

s an

d co

rpor

atio

ns

At t

he s

ame

time,

indi

vidu

als

:•A

re m

ore

expo

sed

and

vuln

erab

le to

the

pote

ntia

lly d

ram

atic

co

nseq

uenc

es o

f dis

aste

rs

•Hav

e gr

eate

r ne

eds

to m

ake

impo

rtan

t dec

isio

ns a

s re

gard

s m

itiga

tion

mea

sure

s an

d co

vera

ge

II.

Impo

rtan

ce o

f En

hanc

ing

Awar

enes

s on

and

Res

pons

iven

ess

to

Pote

ntia

l Im

pact

s of

Lar

ge-S

cale

Dis

aste

rs

(1)

Gap

s in

ris

k co

vera

ge/m

itig

atio

n

Low

leve

l of

cove

rage

/pre

vent

ion

of in

divi

dual

s an

d th

eir

prop

erty

in

OEC

D f

or c

erta

in r

isks

and

in e

mer

ging

eco

nom

ies

Dif

fere

nce

s be

twee

n g

loba

l dam

ages

an

d in

sure

d lo

sses

an

d be

twee

n

Emer

gin

g an

d O

ECD

cou

ntr

ies

Un

der

cove

rag

e e

ven

in r

isk

pron

e ar

ea

Vu

lner

able

gro

up

s ar

e m

ore

at r

isk

Ris

k as

sess

men

t pr

oces

ses

in c

orpo

ratio

nsco

uld

be f

urth

er

stre

ngth

ened

In

adeq

uate

cov

erag

e: u

nder

cov

erag

e of

ass

ets

at r

isks

Incr

ease

d co

sts

of d

isas

ters

for

indi

vidu

als,

the

ove

rall

econ

omy

and

com

mun

ity a

nd g

over

nmen

ts m

ay ju

stify

soc

ial i

nter

vent

ion

toen

hanc

e ris

k aw

aren

ess

and

prom

ote

miti

gatio

n m

easu

res

(2)

Rat

ion

ale

for

thes

e ga

ps :

Obj

ecti

ve v

s.Su

bjec

tive

rea

son

s

Surv

ey b

y Ti

me

Mag

azin

e in

200

6 in

the

US

:

84%

of

Amer

ican

s fe

lt th

at t

hey

wer

e no

t w

ell p

repa

red

shou

ld a

nat

ural

di

sast

er

strik

e th

eir

com

mun

ity.

Aske

d w

hy t

hey

did

not

take

ste

ps t

o pr

epar

e an

d ge

t co

vera

ge, t

he

resp

onde

nts

tend

ed t

o de

ny t

hat

they

wer

e at

ris

ks:

49%

did

not

thi

nk t

hey

live

in a

n ar

ea a

t ris

k -r

isk

deni

al44

% d

id n

ot k

now

how

to

prep

are

-la

ck o

f in

form

atio

n32

% r

espo

nden

ts d

id n

ot b

elie

ve t

hat

prep

arin

g w

ould

hel

p –

lack

of

conf

iden

ce in

pro

pose

d so

luti

ons

27 %

did

not

hav

e tim

e to

pre

pare

-im

plie

d co

st/t

ime

of p

reve

ntiv

e m

easu

res-

“myo

pia”

Indi

vidu

als

do n

ot n

eces

saril

y m

ake

deci

sion

s an

d ac

t w

ith a

vie

w t

o se

nsib

le a

nd r

atio

nal r

easo

ns

(2)

Rat

ion

ale

for

thes

e ga

ps :

Insu

ffic

ien

tin

form

atio

n a

nd

awar

enes

s?

Gen

eral

lack

of

awar

enes

s an

d as

sess

men

t of

m

ost

impo

rtan

t ris

k ex

posu

res

and

cove

rage

ne

eds

Insu

ffic

ient

aw

aren

ess

and

unde

rsta

ndin

g of

the

pr

otec

tion

offe

red

by p

ublic

and

/or

priv

ate

insu

ranc

e sc

hem

es a

gain

st la

rge-

scal

e di

sast

ers

(2)

Rat

ion

ale

for

thes

e ga

ps:

Pas

sive

beh

avio

urs

as r

egar

ds r

isks

Pass

ive

beha

viou

r as

reg

ards

cov

erag

e an

d m

itiga

tion

mea

sure

s

Lack

of

trus

t an

d co

nfid

ence

in in

stitu

tions

pro

vidi

ng

cove

rage

and

in e

x-an

te s

olut

ions

Cons

umer

s’ m

yopi

a an

d pr

ocra

stin

atio

nvs

. “i

nsur

ance

/pre

vent

ive

cultu

re”

Relia

nce

on e

x-po

st a

ssis

tanc

e fr

om t

he S

tate

(3)

Ch

alle

nge

s of

com

mu

nic

atio

n a

nd

inte

rven

tion

on

ris

k

2 pu

rpos

es:

Appr

opria

te in

form

atio

n on

ris

k: li

kelih

ood

of d

isas

ters

and

the

ir co

nseq

uenc

es in

an

unce

rtai

n en

viro

nmen

t Ch

angi

ng in

divi

dual

s an

d co

rpor

atio

ns’

beha

viou

rs t

owar

ds r

isks

III.

Wha

t ca

n be

don

e?

OEC

D G

ood

Prac

tices

for

En

hanc

ed R

isk

Awar

enes

s an

d Ed

ucat

ion

on I

nsur

ance

Iss

ues

OEC

D P

roje

ct o

n F

inan

cial

Edu

cati

onan

d R

ole

in R

aisi

ng

Ris

k A

war

enes

s

Mai

n o

utc

omes

of

OEC

D C

ompr

ehen

sive

Fin

anci

al E

duca

tion

proj

ect

star

ted

in 2

003

:

Dev

elop

men

t of

a R

ecom

men

dati

on o

n P

rin

cipl

es a

nd

Goo

d pr

acti

ces

for

Rec

omm

enda

tion

on

Pri

nci

ples

an

d G

ood

prac

tice

s fo

r Fi

nan

cial

Ed

uca

tion

an

d A

war

enes

sFi

nan

cial

Ed

uca

tion

an

d A

war

enes

s(J

un

e 2

00

5)

Pu

blic

atio

n o

f th

e fi

rst

maj

or in

tern

atio

nal

stu

dy o

n f

inan

cial

edu

cati

on

Impr

ovin

g Fi

nanc

ial L

iter

acy:

Ana

lysi

s of

Iss

ues

and

Polic

ies

Impr

ovin

g Fi

nanc

ial L

iter

acy:

Ana

lysi

s of

Iss

ues

and

Polic

ies

((Nov

embe

r 2

00

5).

Wor

k of

th

e In

sura

nce

an

d P

riva

te P

ensi

ons

Com

mit

tee

focu

sed

on

asse

ssin

g, s

urv

eyin

g an

d el

abor

atin

g po

licy

guid

ance

rel

ativ

e to

risk

aw

aren

ess

and

edu

cati

on o

n in

sura

nce

issu

es

Elab

orat

ion

and

fin

alis

atio

n o

f a

set

of G

ood

Prac

tice

s fo

r En

hanc

ed R

isk

Aw

aren

ess

and

Educ

atio

n on

Ins

uran

ce I

ssue

s

Rat

ion

ale:

•In

crea

sed

indi

vidu

als’

expo

sure

an

d re

spon

sibi

lity

for

man

agin

g di

vers

e ri

sks

(i.e

. lar

ge-s

cale

, lon

gevi

ty a

nd

hea

lth

-rel

ated

ris

ks)

Impo

rtan

ce o

f ra

isin

g aw

aren

ess

on t

he

impo

rtan

ce o

f se

ekin

g pr

otec

tion

aga

inst

th

ese

risk

s in

clu

ding

th

rou

gh

priv

ate

fin

anci

al a

nd

insu

ran

ce v

ehic

les

•C

ompl

exit

y an

d di

vers

ity

of f

inan

cial

(in

clu

din

g pe

nsi

on p

rodu

cts)

an

d in

sura

nce

pro

duct

s to

mee

t th

ese

nee

ds f

or c

over

age

Impo

rtan

ce o

f im

prov

ing

edu

cati

on a

nd

capa

bilit

y on

fi

nan

cial

and

insu

ran

ce p

rodu

cts

Ou

tlin

e :

1)

Obj

ecti

ves

and

Fram

ewor

k

2)

Rol

e an

d re

spon

sibi

litie

s of

mai

n s

take

hol

ders

Gov

ern

men

tIn

sura

nce

mar

ket

play

ers

Oth

er s

ocia

l an

d bu

sin

ess

part

ner

3)

Pro

gram

mes

an

d m

ean

s

(1)

Cor

e O

bjec

tive

s of

th

e O

ECD

Goo

d pr

acti

ces

for

Enh

ance

d R

isk

Aw

aren

ess

and

Educ

atio

n o

n I

nsu

ran

ce I

ssu

es

1.H

eigh

teni

ng a

war

enes

s an

d re

spon

sibi

lity

vis-

à-vi

s th

e po

ten

tial

ris

ksto

whi

ch in

divi

dual

s ar

e ex

pose

d an

d th

e m

ean

s by

wh

ich

insu

ran

ce c

an c

over

th

em

2.En

ablin

g ci

tize

ns

to d

evel

op t

he

know

ledg

e, u

nde

rsta

ndi

ng,

ca

paci

ties

an

d co

nfi

den

ce n

eede

dto

ade

quat

ely

appr

aise

and

un

ders

tand

the

pol

icie

s th

ey r

equi

re, t

o kn

ow w

here

to

look

for

ad

ditio

nal i

nfor

mat

ion

and

obje

ctiv

e ad

vice

s if

they

nee

d it,

to

mak

e in

form

ed d

ecis

ion

sab

out

how

to

prot

ect

them

selv

es a

nd

thei

r re

lativ

es a

nd t

o ad

opt

a pr

oact

ive

beh

avio

ur

as r

egar

ds

thei

r ri

sk e

xpos

ure

an

d in

sura

nce

cov

erag

e

(2)

Rol

es o

f m

ain

sta

keh

olde

rs

Pu

blic

au

thor

itie

s:

vario

us m

inis

trie

s an

d ag

enci

esAs

sess

men

t of

ris

k–ex

posu

re a

nd m

appi

ng o

f ris

k-pr

one

area

Surv

ey o

f in

divi

dual

s’ n

eeds

for

incr

ease

d ris

k aw

aren

ess

and

liter

acy

Educ

atio

n an

d in

form

atio

n of

indi

vidu

als

on r

isk,

pre

vent

ive

mea

sure

s an

d ex

istin

g co

vera

geD

evel

opm

ent

of b

road

aw

aren

ess

cam

paig

n al

so t

arge

ting

vuln

erab

le g

roup

s an

d ad

apte

d to

var

ious

pub

lic n

eeds

Coor

dina

tion

of o

ther

sta

keho

lder

s’ in

itiat

ives

and

the

med

iaReg

ulat

ion:

pos

sibl

e in

trod

uctio

n of

com

puls

ory

insu

ranc

e (a

t af

ford

able

rat

e) f

or s

ever

e ris

ks in

ris

k-pr

one

area

and

/or

for

vuln

erab

le g

roup

s As

sess

men

t of

inte

rven

tions

and

initi

ativ

es

(2)

Rol

es o

f m

ain

sta

keh

olde

rs

The

insu

ran

ce in

dust

ry:

insu

rers

/ban

cass

urer

s an

d in

term

edia

ries

As

sess

men

t of

and

Inf

orm

atio

n on

indi

vidu

als’

and

corp

orat

ions

’ris

k ex

posu

re

Prom

otio

n an

d de

velo

pmen

t of

pre

vent

ion

cam

paig

ns a

imed

at

rais

ing

risk

awar

enes

s ag

ains

t sp

ecifi

c ris

ks

A w

ide

rang

e of

oth

er s

ocia

l an

d ec

onom

ic

stak

ehol

ders

an

d lo

cal n

etw

orks

Indi

vidu

als’

an

d co

rpor

atio

ns’

res

pon

sibi

lity

(3)

Mea

ns

and

Pro

gram

mes

Ass

essi

ng

and

targ

etin

g’

Ass

essi

ng

and

targ

etin

g’

indi

vidu

als/

corp

orat

ion

s in

divi

dual

s/co

rpor

atio

ns

nee

ds a

s re

gard

s ri

skn

eeds

as

rega

rds

risk

Sele

cted

ris

ks

Vu

lner

able

gro

ups

Type

s an

d co

nte

nt

of

the

info

rmat

ion

Pas

sive

beh

avio

urs

Dev

elop

ing

awar

enes

s an

d lit

erac

y on

ris

k an

d ex

isti

ng

alte

rnat

ive

cove

rage

s

Educ

atin

g th

e ed

ucat

ors

Inte

grat

ing

basi

c ri

sk

prev

enti

on a

sses

smen

t an

d in

sura

nce

not

ion

s in

tosc

hoo

l pro

gram

mes

an

d cu

rric

ula

On

-goi

ng/

lon

g-te

rm

acti

ons/

trai

nin

g

Pos

sibl

e ca

se f

or

com

puls

ory

cove

rage

Usi

ng

a va

riet

y of

ta

ilore

d to

ols

Pap

er m

ater

ials

Inte

rnet

/Web

site

Bro

ad m

edia

ca

mpa

ign

s

Loca

l net

wor

kan

d kn

owle

dge

Eval

uat

ing

init

iati

ves’

Ef

fect

iven

ess

and

Effi

cien

cy

Pre

dete

rmin

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activ

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netw

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are

very

muc

h w

elco

me

to s

hare

with

us

succ

essf

ul e

xper

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es,

initi

ativ

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nd p

roje

cts

rela

ting

to r

aisi

ng r

isk

awar

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d ed

ucat

ion

on (

insu

ranc

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over

age

in y

our

coun

trie

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THAN

K YO

U F

OR

YOU

R

ATTE

NTI

ON

!

Flor

e-An

ne.M

essy

@oe

cd.o

rgw

ww

.oec

d.or

g/da

f/fin

anci

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ion