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The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director [email protected] University of California, Washington D.C. April 19, 2011 - http://opim.wharton.upenn.edu/risk/

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Page 1: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

The Wharton Risk Management and Decision Processes CenterOver 25 years of leading research into catastrophe risk

Erwann Michel-Kerjan, Managing [email protected]

University of California, Washington D.C.

April 19, 2011 - http://opim.wharton.upenn.edu/risk/

Page 2: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

What We Are AboutIf a single feature has served to define the

human experience in the first part of the 21st century, it is the unrelenting onset of catastrophes that were largely unforeseen in scale over such short period of time.

Page 3: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

The Consequences

The question of managing and financing extreme events is high on the agendas of top decision-makers in the private and public sectors (no less than 7 sessions in Davos)

With globalization of social and economic activities, risks are becoming more global as well – major interdependent effects

Demand is thus growing for high-level research by neutral institutions that can add value to businesses and evaluate public policy changes here and abroad

Page 4: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

About usSince its inception 27 years ago, the Wharton

Risk Center has developed into one of the world’s most recognized centers for the study of catastrophe risk management, based both on its output and its global network of partnerships in the public, private, and educational sectors

Today, 50 faculty and doctoral students are associated with the Center’s activities

Page 5: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

How We Do This

Risk Center

Rese

arc

h

Ed

uca

tion

Bu

sin

ess

& P

olic

ySupport of basic and applied research in human decision processes and risk management

Support of efforts to inform and shape business innovations and public policy

Support of education in the area of decision making at Penn, particularly at the doctoral level

Page 6: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

Research:The Kinds Of Questions We Ask

Why do we fail to learn from disasters?

Right after Hurricane Katrina Today

Page 7: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

Is it possible to efficiently and equitably insure against large-scale terrorist attacks and man-made events that can have catastrophic consequences with unknowable odds?

Page 8: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

What are the economic risks posed by climate variability, and how can we best adapt to more frequent and extreme climate-related catastrophes? What are the business opportunities?

Page 9: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

Partnership with other Centers

IGEL/Wharton – environmental sustainability

Center for Leadership and Change Management – enterprise risk management

Harvard – nuclear/international securityGreater Philadelphia Innovation Cluster –

risk and decision processesLSE/Columbia/CMU – climate

catastrophes

Page 11: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

Business innovations and policy-oriented research

Page 12: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

National Flood Insurance Program(flood risk reform)

Terrorism Risk Insurance Act(terrorism insurance reform)

Natural Hazard Preparedness and Response

Roles in Washington

Page 13: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

Education Since 2005, the Center has used funds from its Ackoff endowment to provide annual research fellowships to doctoral students working on problems in decision making and risk management. In 2010, 23 fellowships across the Wharton School and the University of Pennsylvania were awarded.

Page 14: The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director

More about the Wharton Risk Center

http://opim.wharton.upenn.edu/risk