Managing Risk in Reinsurance

Niels Viggo Hauter; Geoffrey  Jones

Book | 2017

Managing Risk in Reinsurance: From City Fires to Global Warming

by Niels Viggo Hauter and Geoffrey Jones

Abstract

This is the first book to provide a comprehensive history of the reinsurance industry from the nineteenth century to the present day. Reinsurance developed at the fringe of financial services and, for most of its existence, was largely unnoticed outside the expert community. However more recently public and professional sensitivity towards managing risks has increased. This book traces the global development of reinsurance and explores how the nature of risk itself has changed over time. It highlights key aspects that have shaped the evolving industry, including shifts in risk engineering and risk management, the development of actuarial science, and the impact of changes in political and regulatory contexts. The authors point to the special role reinsurers have played in the capitalist system. As the industry developed, it had a vested interest in preventing excessive risks, while also providing complex societies with a mechanism to limit the damage that natural and other catastrophes inflicted. This has led reinsurers, once a very secretive industry, to take increasingly public stances on the risk of human-induced climate change and the need to take urgent action to contain it.

Keywords: globalization; Insurance; risk management; business history; Globalization; Risk and Uncertainty; Financial Services Industry; Insurance Industry; Africa; Europe; Latin America; North and Central America; Asia;

Format: Print

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Citation:

Hauter, Niels Viggo and Geoffrey Jones, eds. Managing Risk in Reinsurance: From City Fires to Global Warming. New York: Oxford University Press, 2017.

This case examines the role of Cisco led by John Chambers in facilitating web filtering in China. It begins by tracing the origins of Cisco as a pioneer of networking equipment. John Chambers, who had worked as a sales manager at IBM and Wang Laboratories, joined Cisco in 1991 and became CEO in 1995. The company expanded rapidly thereafter, acquiring many firms and growing globally, including in China, where it virtually created the internet. The case explores how the firm facilitated surveillance and monitoring of the internet under the Golden Shield project launched in 2000, and in 2004 served as a key participant in the CN2 upgrade which greatly enhanced official capability to filter content online. The case ends in 2007 with Chambers announcing further capital expenditure in China, but facing growing criticism by US Congress and others for Cisco's human rights record. At the same time, Cisco faced a powerful domestic competitor in China, Huawei, which had grown rapidly by investing in innovation even as Cisco pursued a share buy-back campaign after experiencing a sharp fall in its share price following the end of the Dot Com bubble. The case provides a vehicle for exploring the ethical and human rights responsibilities of corporations in the technology sector, as well as the impact of the internet on democracy.

The case examines the entrepreneurial career of Rupert Murdoch and the growth of News Corporation from a small Australian newspaper to a global media giant. It shows how he expanded geographically to Europe, the United States, and Asia and from newspapers to the film and television industries. The case identifies the personal role of Murdoch in this growth and the role of his family in its management. The case considers the political impact of News Corporation's newspapers and other media and their alleged role in shaping political opinion.

Working Paper | HBS Working Paper Series | 2018

Business, Governments and Political Risk in South Asia and Latin America since 1970

Geoffrey Jones and Rachael Comunale

This working paper provides a new perspective on how businesses have responded to political risk in South Asia and Latin America over the last half century. The existing business history literature on political risk is focused on the experiences of Western multinationals in the 20th century, especially in Nazi Germany and the post-colonial developing world. This working paper is instead focused on perceptions of political risk by domestic business leaders active in Latin America and South Asia since the 1970s. Employing data from the Creating Emerging Markets oral history database developed at the Harvard Business School, the working paper identifies five major sources of political risk: macroeconomic and policy turbulence, excessive bureaucracy, political instability, corruption, and violence. Employing NVivo coding, marked regional differences were identified. Macroeconomic and policy turbulence was the biggest perceived source of risk in Latin America. Excessive bureaucracy was the biggest source of perceived risk in South Asia. There were regional differences also in how leaders in different regions responded to the same risk. In both regions business leaders reported having to dedicate significant time to navigating government regulations, but interviewees in South Asia frequently reported attempting to steer clear from highly regulated industries, while many interviewees in Latin America discussed how they adapted to heavier government oversight by forming closer ties or working relationships with incumbent administrations.

Keywords: Business and Government Relations; Risk Management; Government and Politics; Business History; South Asia; Latin America;

Citation:

Jones, Geoffrey, and Rachael Comunale. "Business, Governments and Political Risk in South Asia and Latin America since 1970." Harvard Business School Working Paper, No. 18-102, May 2018. View Details

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Managing Risk in Reinsurance: From City Fires to Global Warming

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