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I appreciate the various replies -- thanks!<br>
<br>
I'm still sorting through my particular angle on this topic, and
further comments are welcome, but I wanted to pause to express my
appreciation at response so far.<br>
<br>
It seems that at least in some cases a confounding issue is whether
an elevated risk is associated with increased profits. For example,
if insurance premiums are small compared to profit, then you could
increase profit more easily simply by scaling up operations even at
elevated risk rather than spending time reducing a small piece of
your expense pie. This would argue against insurance premium
economic pressure necessarily leading to lower risk in the absence
of regulation.<br>
<br>
A potential case in point here might be commercial maritime
operations. I understand the primary pressure to keep risk in check
here is insurance rather than regulation. But that has resulted
in
a significant fatality rate.<br>
<br>
For example:<br>
<a class="moz-txt-link-freetext" href="https://www.cdc.gov/niosh/programs/cmshs/marine_transportation.html">https://www.cdc.gov/niosh/programs/cmshs/marine_transportation.html</a><br>
"From 2011–2017, there were 87 fatal injuries (18.4 per 100,000
workers) among marine transportation workers, nearly <b><u>six
times the rate of all U.S. workers</u></b>."<br>
<br>
This one shows some improvement over time, but still a high ratio
compared to other occupations:<br>
<a class="moz-txt-link-freetext" href="https://academic.oup.com/occmed/article/64/4/259/1464740">https://academic.oup.com/occmed/article/64/4/259/1464740</a><br>
"During 2003–12, the fatal accident rate in shipping (14.5 per 100
000) was <b><u>21 times that in the general British workforce, 4.7
times that in the construction industry and 13 times that in
manufacturing</u></b>. Of 20 merchant fleets worldwide with
population-based fatal accident rates, most have shown large
reductions over time."<br>
<br>
More to understand, but an interesting topic, at least to me so far.<br>
<br>
-- Phil<br>
<br>
<br>
<div class="moz-cite-prefix">On 4/11/2021 8:24 PM, Phil Koopman
wrote:<br>
</div>
<blockquote type="cite"
cite="mid:1a78e814-226e-27f9-cb61-11c2f74d6eaa@gmail.com">I'm
looking for opinions and previous work regarding the proposition
that insurance premium economic pressure -- all by itself -- is
likely to result in an ALARP or similar safety outcome for life
critical systems (trains, planes, automobiles, etc.) in the
absence of regulation or any other safety pressure. Details below
if this is of interest.
<br>
<br>
--------------
<br>
<br>
I am interested in the relationship between economic pressure from
insurance premiums and safety outcomes. I realize these things
are messy, there are multiple factors in practice, "it all
depends," and that regulation to some degree puts its thumb on the
scale (some domains more than others), so I understand this is
something of a theoretical exercise.
<br>
<br>
I'd expect some correlation. In particular I'd think that as a
generality improving safety will over the long term yield lower
insurance premiums (assuming an efficient competitive market, not
worrying about negotiating power imbalance between individual
consumers and insurance providers, etc.). I'm aware there are
complications such as expensive crash protection consumables that
are damaged in the course of reducing harm severity that can push
back against this correlation. And I'm aware of liability issues,
but let's say insurance ultimately pays out for those too. And
"self-insurance" counts as insurance.
<br>
<br>
The pointed question of interest is whether there is a reason to
believe that insurance premium economic pressure, all by itself,
is likely to lead to acceptable safety for life critical systems.
<br>
<br>
My initial position is that I'd be surprised if insurance premiums
alone (with no regulation) necessarily result in an ALARP result
for typical modes of transportation. I'd expect they'd prevent a
really horrible result, but not necessarily safety I'd want to
have in transportation I'm personally going to use.
<br>
<br>
Among other reasons, if insurance premiums resulted in ALARP, I'd
expect we wouldn't need regulators (which we do need in practice).
<br>
<br>
But perhaps I'm wrong. Or perhaps insurance economics driving
ALARP is true in theory but not in practice for reasons that are
interesting.
<br>
<br>
Does anyone know of a good treatment of this topic?
<br>
<br>
Thanks,
<br>
-- Phil
<br>
<br>
</blockquote>
<br>
<br>
<pre class="moz-signature" cols="72">--
Prof. Phil Koopman <a class="moz-txt-link-abbreviated" href="mailto:koopman@cmu.edu">koopman@cmu.edu</a>
(he/him/his) <a class="moz-txt-link-freetext" href="https://users.ece.cmu.edu/~koopman/">https://users.ece.cmu.edu/~koopman/</a></pre>
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