Insurance companies throw time into reverse and will continue to exist as long as risk itself, finance guru Peter Bernstein told delegates.
Bernstein, the author of worldwide best seller Against the Gods, lectured delegates on Truth and Consequences.
His speech encompassed Shakespeare, French mathematician Blaise Pascal, risk theorist John von Neumann and evolutionary biologist Stephen Jay Gould.
Bernstein said that both insurance and financial markets had a focus on consequences and reversibility, yet they had taken a long time to figure out that “they should be working on the same side of the street, peddling the same brands of wares, courting the same kinds of customers”.
He said “both parties are deeply involved in helping customers deal with the consequences of their past decisions”.
“The most elegant statistical features of risk management have no excuse for being, except to deal with the consequences of outcomes differing from the way we've placed our bets,” he said.
“This is precisely the point where financial risk management and insurance can find their greatest opportunities and most productive linkages.”