From the Editor

Do You Have Skin in the Game?

By: | July 31, 2018

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected].

The intellect of author Nassim Nicholas Taleb is so far beyond mine that we might as well be on different planets. Nonetheless, scabrous, ink-stained, hubristic journalist that I am, (Taleb nods grimly), I’d like to credit him for a couple of concepts, one of which provides this issue’s theme.

Taleb is the author of the book, “The Black Swan,” covering events that few could say they saw coming, but which could result in massive losses — insured and uninsured. We can thank him for the theme of our August 2018 issue.

Taleb is also the author of “Skin in the Game,” which I’m currently reading. The theme of this book, from what my limited powers can deduce, is that we should take the word of non-practitioners with a big grain of salt.

Myriads of people will offer opinions, advice even, on a given topic, but in many cases, they are not doers: They have nothing at stake to govern their verbiage; they have no skin in the game.
Insurers do have skin in the game, sometimes quite a lot of it, which is why the opinions of insurance executives can be so interesting.

Thinking about whether school teachers should carry guns? Insurers already cover school districts where they do, and they can tell you why. Debating the wisdom of a new oil pipeline? The underwriters providing the backstop for the project can cite statistics to you that will wash away political conjecture and hype and at least give you some actual facts.

Call insurers conservative; call them boring. But the one thing you can’t call insurers is unengaged. They are very much engaged and care about outcomes, because they write checks with lots of zeros in them.

So then, a nod to Nassim Taleb, who gave us the theme for this issue. A nod also to insurers, because as I think Taleb would have to agree, (although he might not) they have skin in the game. &

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