- How we work
- Recent projects
Sensationalism does have a role in decision-making; it challenges orthodoxy and can provide the impetus for change. We recognise that but don’t employ sensationalism.
Sensationalism challenges orthodoxy and enables decision-makers to ask if a new opinion is needed. But it also causes people to dig their heels in. Power is sometimes exercised for its own sake.
Insurance has an inbuilt structure which handles sensationalism in an orderly and auditable way: it is an inevitable consequence of the management of uncertainty, the thing insurers are really good at, and a requirement of insurance regulation.
When asking how much a line of business is likely to cost e.g. domestic flood insurance, the insurer uses his knowledge of how it went in previous years and making allowance for change, projects this forward as far as he needs to. But he also estimates the uncertainty in that projection. The effect of sensational news means he will ask if the uncertainty estimate is wide enough. If sensationalism itself can change the amount of money at risk then sensationalism is a proper factor to take into account. If not, then the objective meaning of the story must take precedence. A level-headed view of the facts will help him decide whether or not the story will blow over or will make a difference to the bottom line if other steps are not taken.
The Radar project does report on the sensational stories created by others and where there are objective facts to evaluate, reports these too. However, it never attempts to create a sensation. Instead it makes estimates of the likely impact on loss or the estimate of uncertainty in loss, or explains to insurers how they might do this for themselves.