other events and activities which are currently taking place in the world, for even in the most sophisticated projects there are a surprising number of these which can be considered immediately as being responsive to insurance techniques. In brief they are capable of being absorbed into a spread of risks. Those events or activities which are unique or speculative will often be found to be smaller in number than at first thought but these are not suitable subjects for insurance. To put the matter in commercial terms they are risks for the equity shareholders or the sponsoring authorities. Presumably they carry with them opportunities of potential benefit which are commensurate with these risks. Before considering what risks are to be transferred to insurer’s, banks, etc., it is essential that the owners or sponsoring authorities of such projects are brought to realise quite clearly that they will have to bear certain types of risks themselves. I would not however like to give the impression that even the most competent institutions in the insurance world sit in the self-satisfied knowledge that all their problems have been solved. As in any other sphere of serious, disciplined activity, there are a large number of unsolved problems, inevitably when one considers the rapidity of change in the modern world and the way in which insurance is touched by almost every aspect of human activity. Responsible underwriters may however give the impression of being reluctant to embrace novel problems but this is simply because they need to consider them carefully — the consequences are, after all, going to be with them for a long time. The greatest aid to speed in the solution of novel problems in insurance is clarity of definition of the activity or event, the risks of which are to be transferred by means of insurance. Again I am sure that I do not need to emphasize to this audience that producing a precise definition is often a difficult task in itself but the fact remains that it is impossible to transfer a risk satisfactorily unless both he who wishes to transfer it and he who is considering accepting it are quite sure that they are both looking at the same thing. Whatever the other problems, it is certain that what cannot be defined and quantified cannot be transferred. There is a tendency even among sophisticated and experienced people to plan their project and, in effect make all the decisions before turning to insurance underwriters with requests to accept a large variety of risks. In a very large number of cases these risks could have been dealt with in other ways, more effectively and more economically if those experienced in insurance had been brought in at the earliest stage and consulted as the planning developed. On large and novel projects it is extremely dangerous to make assumptions about other peoples professional services and assume that they will simply be available in very ordinary terms as and when one requires them. As evidenced by the need for definition, good communication is a primary requirement in getting the maximum out of the insurance world. There is an additional factor which needs to be taken into account in examining the risks associated with a project or projects of the scale under discussion. In more moderately sized projects, virtually everyone engaged is an experienced professional. This means that everyone understands what he has to do, the sort of problems he has to solve and what his relationships should be with others involved in the same project. On projects of this scale and complexity however a large number of those involved will not be experienced in projects of this scale and some will not be experienced in projects at all. There are those who are responsible for political considerations, international relations, environmental matters, social and defence considerations and many others. Therefore in the major project the technical and financial considerations which usually dominate the smaller project almost to the
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