The Scariest Risk of All: Irrationality

irrational fear

Much of the news we receive and ‘drama’ we watch on television (or online) is focused on the consequences of terrible things happening. If we believed every word of it we’d be convinced that we are on the verge of being killed by an incurable disease, terrorists, floods, earthquakes or tsunamis, or being thrown back to the dark ages because all our electronic devices crash under an immense cyber-attack.

In fact many of these risks remain at low probabilities and whilst they seem apocalyptic they are unlikely to really take hold in a way that will dramatically change our world. Nevertheless these are risks that hold our attention as they make newsworthy subjects.

It seems to me that the really scary risk is far more benign and stems from the fact that we are in receipt of too much information, much of which is uncorroborated and spreads via unreliable sources (such as social media).

As individuals we tend to take insufficient time to sit back and validate a risk rationally.  The consequences of this are that we slow the recovery of our economies, stagnate wealth creation and overall improvement in human development.

Not enough is spent on good education and giving people the ability to make rational decisions about risks that really affect them and which they have the ability to control. For example, on an individual level it is surprising that more people do not embrace a healthier lifestyle—which they can control—yet they worry that the government isn’t doing anything to protect them against terrorists, an extremely remote risk for most people.

About Geoff Taylor

Geoff Taylor is an Executive Director for Willis Group, based in London. Geoff has been a risk manager for major gl…
Categories: Claim & Risk Control

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