Many people are still uncertain about the meaning and insurance implications of antibiotic resistance. For liability insurance the problem is one of quantum inflation and increased probability of claim. Antibiotic resistance directly means that the severity of problematic food poisoning and broken skin injuries increases, leading to quantum inflation and, people with severe injuries are more likely to claim, leading to frequency inflation. Claims for antibiotic resistance per se would be rare since resistance is  a naturally occurring event. Injury severity, premature death and the higher risks involved in elective medical interventions would have effects on life insurances. If all food was properly cooked, there would be no food poisoning claims. If wounds were thoroughly cleaned and disinfected the rate of severe infection would be reduced. Liability attaches to the cause of infection, not (yet) to the cause of resistance. A new technology is needed On the whole antibiotics do not im

Britain is being asked to decide whether or not to be a member of the EU. Dire warnings and visions of heaven for either option are now common fare in conversations and media formats. Warnings and visions are usually vaguely attached to some semi-acceptable assertion, a half-explained mechanism of action, a snippet from some potentially relevant historical setting or an appeal to what some would see as self-interest. Career politicians are having a wonderful time of it. The key factors in judging the prospects of any institution all relate to the optimum development and use of resources. For this, we need facts and we need mechanisms of action that have predictive value within the range of foreseeable future facts. The list of resources is very lengthy. It includes: communication, the value of tradeable assets, ideas, education, transport, health, security, regulation, essential infrastructure, trade mechanisms, justice, political system… Mechanisms are essentially either; accide

Is there an exposure to asbestos which does not “legally cause” mesothelioma? Evidence from: C Gilham et al. Occup Environ Med (2015);0:1–10. doi:10.1136/oemed-2015-103074 Gilham et al, compared asbestos fibre burdens from the lungs of mesothelioma and lung cancer cases and from these, developed risk equations. 79% of the fibres they observed were amosite; the subjects were all resident in the UK. Fibre burden and diagnosis were objective and precise; which means the main uncertainties were in unintentional bias and biological variability, about which not much more could be done except by sub categorisation by genetic and epigenetic profile (which would require a much bigger study). Using mathematical methods adapted from the design of optical telescopes and electronic circuits, we have extended the reported analysis to make an original estimate of de minimis. Compared with background, and for asbestos fibres which are longer than 5 micrometres, the smallest detectable increase in the

Evidence from: liability exposure scenarios The Arium software uses official trade data to identify links between generators of risk, and via the product supply chain, the injured party. By adding liability insights, the hazard scenario can be tailored to explore the  most likely routes to exposure, i.e. a risk scenario. Sum limits and sum premium can be explicitly calculated from the insurance portfolio. The method is transparent, stress testable, reviewable and auditable. Calculations are analytical in nature. It is just algebra. The tool is ideally suited to the assessment of emerging liability risks. All you need is a scenario based on the state of knowledge. The scenario can be refined as knowledge develops. The Radar service is a great source of data for the development of scenarios. The next thing to do is supply Radar subscribers with pre-made scenarios on a number of emerging liability risks. These will be modified as and when new data emerges. Changes in exposure projections

This week sees global leaders getting together to talk about investment, market and legal mechanisms that may be applied to the political problem called climate change. It is a complex problem, made more complex by the rhetoric of belief vs.denial and self-interest vs.tribalism. Heated exchanges may be giving way to objective rationality. At the recent ABI conference there was a session on climate change, engineered to garner insurance industry support for a 2 degree pledge. Four famous promoters of the pledge took to the stage. Useful oral contributions included: Investment in the Energy Giants may have a limited shelf life, so better consider the resilience of investment income. (I noticed that no timescale was offered). Investments in other major industry players might be better placed if those players could state how much risk they were exposed to if the climate were to change as anticipated. (I wondered that of course the Officers of such firms are only obliged to declare material

Insurers are well on the way to making strategic assessments of IT-related exposures. Most have focused on malicious attack but this leaves out half of the events which could give rise to an insurable loss in traditional insurance products. Many of these losses would be correlated. Potential correlations can be identified through scenario analysis. But first you need a comprehensive picture of your policies and what triggers them. The enclosed methodology provides a systematic approach. cyber evaluation

Our website now includes a link to an insurance assessment tool for nano materials. Those materials which have a significant opportunity to cause nano-related harm are identified if they score above the range 80 to 100. The current advice is that insurers be told of such materials and their actual or intended uses. Initial sense-testing suggests that more than 75% of nano materials would score at below this threshold range (80-100) and thus far  the tool agrees with 18 out of 19 authoritative published assessments. There is a difference of opinion about nano silver. The properties assessed in the tool are: size range, persistence, accessibility, agglomeration, ionic forms and fibre size (where applicable). Responsible manufacturers will have this information as part of their product quality assurance system. Properties such as carcinogenicity, biocidal potential and sensitization are assessed separately as there is no validated nano-specific prediction yet available. As the science dev

Evidence from: http://www.epa.gov/oppt/nano/ March 25, 2015 — As part of the Agency’s effort to ensure a more comprehensive understanding of nanoscale materials in commerce, EPA proposed one-time reporting and recordkeeping requirements under TSCA section 8(a). This proposed rule would require that companies that manufacture certain chemical substances already in commerce as nanoscale materials notify EPA of information including production volume, methods of manufacture and processing, exposure and release information, and available health and safety data… EPA would use information gathered through this reporting rule to determine if any further action under TSCA, including additional information collection, is needed. EPA will accept comments on the proposed rule for 90 days after the date of publication in the Federal Register. Comment The proposal would be more useful if the burden of reporting was risk based. In our view, the great majority of nano materials coul

Evidence from: https://sm.britsafe.org/uncertain-climate-business-risk-resilience Proportionate risk management begins by identifying what you can afford to lose and yet still meet your business objectives. The same is true in the context of climate change. There is no need to get precise predictions about future weather patterns – much can be achieved by looking at the here and now. The article includes several examples of making the appropriate measure of resilience. For example, how many successive days of downtime can you afford, how late can a key delivery be, how far from spec can a new component be. Some of these are obviously affected by weather. A flood can cause shut-down and delayed delivery. Once you have measured your resilience you need to decide how much you should invest, or insure, to reduce that hazard to acceptable levels. High capital infrastructures probably need to be defended, highly mobile businesses don’t need to be defended but do need to know to w

Evidence from: http://www.ilo.org/safework/info/publications/WCMS_301830/lang–en/index.htm Most of the issues for liability insurance are self-evident (employees/colleagues, health care workers, funeral directors, mass transit, vets) and would be expected in EL and public liability. However there is some uncertainty regarding transmission of this disease. The patients become contagious once they begin to show symptoms. They are not contagious during the incubation period.  Men who have recovered from the illness can still spread the virus to their partner through their semen for up to 7 weeks after recovery. Anecdote from the affected region suggests that sexual intercourse once initially ill is unlikely, but this doesn’t solve the problem of sexual transmission in those who survive. Sexual activity could affect employees sent into areas where Ebola is prevalent. Explicit advice on sexual contacts while in an affected area could be viewed by the courts as a reasonable expec

While the frequency of antibiotic resistance continues to rise, the effect on liability loss mitigation remains unclear. Academic and official interest in antibiotic resistance has been focussed on long term public health risk assessment  but fails to express the problem in terms that could assist with liability exposure risk assessments. There are two extremes which are obvious. 1) every infected liability-related injury fails to respond to all known antibiotics. In this case the claimant relies on their own immune system to fight off infection. Surgery and boosting immune competence could assist if provided in the early stages. For liability insurers there would be increased medical costs and a more severe injury to compensate. 2)  when one antibiotic fails, another one is tried and works. In this case the effect on liability exposure is a marginally more severe loss to the claimant and a small increase in medical costs. Should liability insurers be worried? The answer really depends

Evidence from: McMunn v. BABCOCK & WILCOX POWER GENERATION GROUP, INC – ordered on the 27th Feb 2014 The claim was that radiation leaks had caused cancer in the community. There was evidence that the plant in question had emitted 3 kg of highly enriched uranium. If so, permissible lung doses would probably have been exceeded by a considerable margin in some members of the community. Daubert was appealed to on the subject of admissibility of expert testimony. It was concluded that so long as a justifiable method had been adopted then expert evidence is admissible. Alleged flaws in the methodology go to the weight of the expert’s opinion, not its admissibility. “There is a difference between what is unreliable support and what a trier of fact may conclude is insufficient support for an expert’s conclusion.Moreover, because reasonable scientific minds can differ on the methodologies discussed, the motion to exclude the opinion of [expert X] will be denied. R

Following a lecture at the Oxford Martin School; 13th Feb 2014. Task specific machines have been with us for a long time. Sometimes they go wrong. Who to blame? Well it is worth pointing out that slaves and employees have been around for a long time, so liability rules have become quite predictable. A machine is just the agent of the master/owner/user no matter how “intelligent”. What’s different about AI? In AI the machine develops and refines its own optimum manner of performing a function. Of course it does this within the limits of its methods of action, the feedback it gets from taking those actions and the efficiency of the optimisation software. Provided the system is well designed, then the scope of potential harms can be factored out. The designer is to blame. If the system is misused, the user is to blame. But Utility maximisation is not always the social optimum. A self-driving car might find the optimum route but it is a route which would be ethically unac

Thoughts inspired by speakers at the Amlin conference “Systemic Risk of Modelling” 11th Feb Definition of systemic risk was far from decided. The general idea No single definition of systemic risk will cover all situations. Usually what people mean is that there is a mismatch between actual and imagined risk and that the effects of realising this mismatch are contagious. The effect is then realised at a system level. In banking, several mechanisms have been proposed. But in essence they all have the same origin – assets don’t have the value they were supposed to have. Banking has the innate feature that asset values are leveraged and so the effect of mispricing is automatically amplified; an example of positive feedback, especially if further leveraging is used to cover the discrepancy. Errors are sometimes corrected by selling into a falling market, another cause of positive feedback. So, what we are looking for in insurance is: a mechanism of mispricing, where multiple in

Evidence from: http://www.bermudareinsurancemagazine.com/news/praedicat-will-mine-for-footprints-of-casualty-risks “Every mass litigation that we investigated, was preceded by peer-reviewed science by some number of years. We realised that a hypothesis that some product, chemical, substance or exposure can result in bodily injury first emerges years before general acceptance within the scientific community, before public awareness and before the first litigation.” Praedicat aims to identify these trends and pinpoint liability exposures years before they hit re/insurers. The identification engine will employ a text-based data mining system that aggregates the results of peer-reviewed scientific literature. The system examines new hypotheses regarding potential casualty exposures and applies analytics and scoring around these results to determine how the science will evolve over time. Aim: “develop a comprehensive and scalable solution for identifying emerging risks, supported by footpri

Evidence from: 5th December seminar: Oxford Martin School “Now for the long term” Lord Martin Rees and Sir John Beddington spoke around facts and projections contained in a publication of the same title. http://www.oxfordmartin.ox.ac.uk/downloads/commission/Oxford_Martin_Now_for_the_Long_Term.pdf Rees Having looked at the state of play and the academic projections out to 2050, Rees espoused the following ideas. Global solutions are needed [but perhaps instituted by new bodies, not just the UN], Equality is the main solution, anything which should add to sustainability must be good, whatever we do now should not in effect be paid for by our great grandchildren. Besides the political inputs he also noted that it is the developed world that is most vulnerable to a sudden loss of capacity in IT. He thought that investment in resilience measures would be justifiable. He suggested some sort of global watchdog that could help protect the more dependent. Beddington By 2050 in Asia

Evidence from: Sir Mark Walport, speaking at the Oxford Martin School. 3rd December 2013. The focus was on privacy and personal identity. One argument was that out of all the information we have control of we choose exactly what and how much we disclose in a given situation. Given that selectivity is not a fundamental problem, should we complain when governments and companies choose what information they wish to represent each of us by? Should we complain when they choose to cross check what we tell them using independent sources? The idea that we are in command of the representation we go by is a fragile one. It was pointed out that not sharing information could present risks to an individual. Obsessive secrecy is not the optimum, complete openness is not the optimum. Somehow a balance must be struck; each case to be judged on its merits. practical problems: Consent to data sharing in exchange for access to services is now a common practice. Does the person really consent or is there

Evidence from: 30th October lectures entitled Is climate change science a barrier to flood management decision making? by Jon Wicks and What is the risk of drought in the Thames basin? by Jim Hall Both speakers had used climate change projections to estimate the effect on water flow. Both had been intensely aware of the political interest in their work. Speaker Jon advised that modelling was useful when it considered the probability of stepping over a critical threshold. First you must know what is the critical threshold e.g. a certain depth of flood water, and this is essentially a political decision. He added that modellers tend to focus on the things they can actually model and to underplay by their absence, the things they cannot model. For example, an administrative decision might increase the population in a low lying area thus approaching a loss of life threshold even in the absence of climate change. He presented an estimate that by 2050 the damage bill in Shanghai would increa

Evidence from: Oxford water lecture series 23rd Oct 2013 Matt Cullen (ABI) explained flood re, Prof Edmund Penning Rowsell delved into the economics of risk rating and subsidy. The annual property premium in the UK is circa £9bn. Most perils are predictable, but flood losses are very volatile e.g £3bn in 2007 on commercial and domestic flooding combined. Reinsurance would seem to be in the region of £13bn. Around 500,000 homes in the UK are at very high risk of flooding, a high proportion of these are council tax band A and B and have a high probability of not insuring either structure or contents. This causes political embarrassment when large numbers of people find out what it is not to be resilient. Flood Re would offer a subsidised insurance scheme for such domestic risks. It is estimated that home-owners would contribute £140m annually, the property insurance market would top this up with an additional £180m by annual levy. Flood Re would be able to buy reinsurance. The 1:200 year

Evidence from: http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/27_09_13_ipccsummary.pdf The summary is labelled as a summary for policy-makers. As such it provides statements of agreed judgements made by climate scientists. It provides selected illustrative support for those judgements but not in a way that can be independently sense checked. It is hoped that the evidence reports will eventually provide that data in a suitable form. For some unexplained reason, the uncertainty in data points is provided with 90% confidence intervals when the standard for science is the 95% confidence interval. This is not a major criticism but indicates a willingness to report an apparently higher degree of certainty by up to 20 %.  Much larger uncertainties are found in the choice of model rather than how well the essentially similar models agree with each other. Chief among these choices are vertical energy flow mechanisms, which are not well modelled. In the period 1998 to 2012 global mean surface temper

Evidence from: http://www.publications.parliament.uk/pa/cm201314/cmselect/cmtran/117/117.pdf On the subject of evidence: ‘We broadly support the Government’s proposals on improving medical reports but would like to go further and require whiplash claimants to provide more information in support of their claim, such as proof that they saw a medical practitioner shortly after their accident. In addition, we recommend that the Government bring forward  recommendations to reduce the time period during which whiplash claims can be made.’ ‘In our view, the bar to receiving compensation in whiplash cases should  be raised.’ ‘ There should be a presumption against accepting claims where such information is not provided.’ ‘We support the proposal that there should be an accreditation scheme for medical practitioners (who need not all be doctors) who provide medical reports in relation to whiplash claims. We also agree that these reports should be availa

PPI mis-selling has led to wholesale action to reimburse policy-holders. What if the same was true of motor insurance? Paying out claims on an indemnity policy can only be legitimate if the payment can be shown to indemnify. Other payments are gratuitous. Should the cost of gratuitous payments be borne by the general motorist who has no say in it? Well, for good or ill, the insurance is compulsory, so the answer is yes. If the insurer pays, then he passes the bill on to the motorist. But has this happened? Is there gratuity when there should be indemnity? Consider whiplash. Science has, even by medical standards, emphatically shown that physiotherapy provides no foreseeable effect on indemnity. Why should the motorist pay for this? Answer – because insurers do. The bigger problem though is that medical opinion about causation, diagnosis and prognosis has been accepted as legal fact. For whiplash, this is demonstrably unsound.  The medical approach is not consistent with legal fac

Evidence from: SWD(2013) 202 final Public consultation on the new EU occupational safety and health policy framework Responses due 26/08/2013 The document confidently asserts that a central framework on H&S has been essential. The usual harmonisation/leadership argument. Injury accident rates have shown an improvement, it says, but no-one quite knows how to measure them. The impression is that some nations would do far less on H&S were it not for the centralised approach. But, what can be done about SMEs? Has anyone done anything about nano materials, endocrine disruptors and EMFs? The document focuses on the ‘soft’ issues of stress, MSD and ageing. BUT makes a special case for preventable cancer. It also confirms that H&S has been adopted by the wider public health agenda: ‘With regard to public health policy, the degree of coherence between public health and health and safety at work is high. Measures were taken in the areas of tobacco in the workplace and mental he

Evidence from: DWP 14th June 2013 A review of the health and safety executive as a non-departmental public body HSE annual budget is ~£3oom. That is roughly equivalent to 20% of the EL insurance premium collected in the same operational area. HSE have contact with 60% of employers every 3 years, insurers have contact with 85% of employers every year (15% don’t buy EL even when they should, HSE and local authorities are not always great at compliance). HSE claim to have saved the UK from unnecessary costs that would have followed from EC Directives had they not been intercepted. This, political work in addition to its main activities, which are: • Lead others to improve health and safety in the workplace; • Provide an effective regulatory framework; • Secure compliance with the law; and, • Reduce the likelihood of low frequency, high-impact catastrophic incidents. The latter two would seem, in part, to require a non-commercial solution which is independent of political influence a