The subtlety of risk

Driving in BotswanaMany years ago I lived in Botswana, a country with new wealth found in two large diamond mines. One benefit to the people of this windfall was a sudden increase in car ownership as anyone in regular employment could get a government backed car loan.

The car dealerships made bucket loads and road accidents skyrocketed. Alongside copious fender bending, the rate of deaths per kilometre driven rapidly became one of the highest in the world.

Although famed for its law-abiding populace, crime increased too. This included the ‘borrowing’ of vehicles for the lucrative markets for stolen cars and spare parts across the border. This meant that drive around for long enough and you would experience a ding with near certainty and pray loudly for nothing more serious.

Given these circumstances car owners who failed to take out insurance would seem negligent at best or more likely just plain dumb.

Except that premiums on comprehensive policies were exorbitant. Sensibly the government had created a third party safety net scheme using a premium charged on fuel purchases — in principle you could claim for someone else dinging you, but not theft or solitary misfortune. This combination brought out the risk appetite in car owners.

Many decided that money in the pocket was better than payment to mitigate something that might not happen and refused any commercial insurance policies. Stay lucky and you’ll be thousands better off.

Others couldn’t sleep at night knowing that if the dog failed to scare off thieves their car would be in Jo’berg by morning leaving them violated and broke. They paid the premium.

There were those that took the risk and rode their luck. And there were those that paid the premiums and were never visited in the night. For those less lucky the net benefits of insurance became apparent. Over time you would expect that more car owners would spend time on the phone with the Mumbai call centre and fork out the premiums.

I paid up of course but also remained lucky. Not even a claimable ding. A close friend chose to wing it and also avoided any car problems. Tragically and without warning he developed a tick on his face and died of a brain tumour within three months. Vale Gunther, I still miss our intellectual roughhousing.

This story is told many times over in one flavour or another. The human condition is a precarious balance of risk and opportunity that sees us trying to suck in peril and security in the same breath.

If we never took a risk the changing world would swallow us. And if we hadn’t forced some stability we wouldn’t have stayed still long enough to build culture and commerce.

So why mention this obvious requirement that we know humans have retained and exploited to the limit?

I have a hunch that we might be squeezing out the risk takers. There is no shortage of personal risk opportunity, especially for the agile. Youngsters can bungie, pill pop or train surf away youthful adrenaline. But the risk that decides on an insurance policy is different. It is subtler because it also holds some responsibility. It is framed in personal risk but there are consequences beyond me. And this more collective risk is what made us successful as a species.

The mastodon could easily trample early hunter, only there was a personal and collective benefit beyond the thrill. The first crops were sown to benefit the farmer and his family, and soon after the village. As the adrenaline fuelled courageous acts, the risk taking had a collective benefit.

I am not sure that we teach this subtlety of risk. And I am sure that we are squeezing it out of everyday life by making risk taking personal.

Post comments. It would be great to hear your ideas.

 

 

 

 

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