2019-08-03_The_Economist

(C. Jardin) #1

12 The EconomistAugust 3rd 2019


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Insuring for a healthy life
Your article on innovation in
insurance (“Run for cover”, July
20th) did not touch on a funda-
mental transformation that is
taking place across the life-,
health- and motor-insurance
markets, namely incentivising
customers to be healthier and
to make better choices. This
acknowledges that the nature
and treatment of risk has
shifted, from pre-existing risk
to risk driven by behavioural
factors. Some 60% of mortality
and 80% of the global disease
burden are a function of just
four lifestyle choices—lack of
exercise, poor nutrition, smok-
ing and alcohol abuse—which
lead to major non-communi-
cable diseases.
This new approach to risk
allows companies to share the
gains resulting from healthier
choices with their customers,
by funding valuable incentives
and lowering premiums, creat-
ing a shared-value loop. It has
also created a more profound
role for insurers: not only
providing protection against
adverse events, but helping
make society healthier.
adrian gore
Group chief executive
Discovery Vitality
Johannesburg

Insurance companies are
indeed clueless about the most
recent advances in climate and
weather modelling, even
though the risks they cover are
“becoming more severe and
unpredictable.” But because
insurers usually offer short-
term contracts this problem is
of only minor importance to
their business at this point. It
does pose more complex chal-
lenges for governments, prop-
erty owners and lenders, who
are in it for the long-term.
You also lauded the
innovation of “parametric
insurance”, where polices pay
out when clearly defined
parameters, such as rainfall
threshold, are reached. But the
evidence suggests that when
insurers tried to sell these
parametric products (initially
for crops in low-income coun-
tries), the take-up was very low,
even when premiums were

subsidised.Stilltoooften,
parametricinsuranceisakinto
a lotteryticket,asbasisrisk—
thelackofcorrespondence
betweentheparametrictrigger
andexperienceddamage—is
high.Riskmodellingneedsto
improvebeforemanyofthese
productsshouldbesold.
ilannoy
Chairintheeconomics
ofdisasters
VictoriaUniversityof
Wellington
Wellington,NewZealand

A giantincomputing
AlanTuringdidnotbuild
Colossus,anelectronicdigital
computerthatmadea big
contributiontobreakingthe
GermanLorenzcipherinthe
secondworldwar(“Duecredit”,
July20th).Thatacclaimshould
gotoTommyFlowers.Hegot
nopublicrecognitionatthe
timeandhashadprecious
littlesince.Flowerswasborn
toa working-classfamilyin
Poplar,a poorpartofeast
London.Hewaseducated
throughanapprenticeshipand
bytakingnightclassesatthe
UniversityofLondon.He
deservestoberememberedfor
hisachievement.
donaldneal
Hamilton,NewZealand

Colombia’s cocaine problem
“Blow up” (July 6th) reported
on Colombia’s expanded coca
cultivation and the govern-
ment’s poor options for dealing
with it. This illustrates only too
clearly the curse that the un
drug conventions and their
enforcement by America in its
war on drugs have cast upon
the country. There is a case that
Colombia’s guerrilla move-
ments would have made peace
in the early 1990s had it not
been for the cocaine revenues
that gave the farcample
means to carry on. Now, ironi-
cally, a surge in coca cultiva-
tion, that is in part a perverse
result of that peace process, is
fuelling a recrudescence of
violence in the coca-growing
areas that the farcabandoned.
Other countries should give
Colombia time to reduce pro-
duction and support its efforts

intracingassetsanddisrupt-
ingflowsofcash,cocaineand
precursorchemicals,which
canbejustaseffectiveascrop
eradication.InBogotáthereare
concernsthatAmericanimpa-
tiencemightleadtheadminis-
trationtodecertifyColombia
foritsslowprogress.Thiswas
triedinthemid-1990s.It suc-
ceededingettingColombiato
reintroduceextraditionbut
alsocontributedtoa dramatic
increaseincocacultivation
andparamilitaryviolence.
Therecouldnotbea worse
timefora repetitionofthat,
withthepeaceprocessatsuch
a delicatestage.AndColombia
isAmerica’skeyallyindealing
withtheVenezuelancrisis.
sirkeithmorris
BritishAmbassadorto
Colombia,1990-
London

Planning for the future
Scenarios should radically
challenge conventional think-
ing, rather than just sound
crazy, as the leader accompa-
nying The World If suggests
(“Navigating the rapids”, July
6th). At the Oxford Scenarios
Programme, we argue that the
value of scenarios lies in the
actions taken as a consequence
of thinking through a small set
of alternative possible futures,
which cannot be dismissed as
crazy, and instead have
sufficient connection with
reality to pose credible
challenges to current thinking.
What may appear crazy to one
member of a team is reason-
able to another. What matters
is making sense of the
apparent strangeness or
incompatibility of contrasting
and different perspectives to
help leaders navigate
turbulence.
Good scenarios are thus
honed for a specific user, use,
and purpose. Rigorous theory
and method guide the use of
these scenarios and help
executives go beyond respond-
ing to things haphazardly.
rafael ramirez
cho khong
trudi lang
cynthia selin
Faculty
Oxford Scenarios Programme

Thanks for the annual summer
brain exercises in The World If.
Reading about future fore-
casting reminds me of Isaac
Asimov’s early novel,
“Foundation”, in which a
mathematician discovers the
future. A lesson can be derived
from this book: the mathema-
tician refuses to share his
findings because by doing so it
would modify, and potentially
annihilate, his predictions.
In other words, by sharing a
handful of speculative scenari-
os, you may have changed the
course of history.
christophe cauvy
Oxford

The future is not always conve-
niently packaged. Around 1990
Bell Laboratories conducted a
survey among its most
insightful prognosticators
regarding the most significant
communications technologies
that would lead us into the
millennium. isdnmade the
list; the internet did not. As
Yogi Berra (may have) said, it’s
tough to make predictions,
especially about the future.
hans mattes
Petaluma, California

The at-odds couple
The parents of the students
who refused to take Trump
supporters as roommates
should be asking for their
tuition back (“Strange bed-
fellows”, July 20th). The core
skill of an educated person is to
be able to listen to an opposing
view, engage with it, find com-
mon ground if possible, learn
from it and respect it. By reject-
ing Trump supporters, these
students mimic his behaviour
by gleefully rejecting anyone
who disagrees with them.
My second thought after
reading the article, is where
can I find an apartment for
$625 a month?
peggy troupin
New York
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