The Wharton Risk Management and Decision Processes Center Over 25 years of leading research into catastrophe risk

1. The Wharton Risk Management and Decision Processes CenterOver 25 years of leading research into catastrophe risk Erwann Michel-Kerjan, Managing Director erwannmk@wharton.upenn.edu University of California, Washington D.C. April 19, 2011 -http://opim.wharton.upenn.edu/risk/

2. What We Are About If a single feature has served to define the human experience in the first part of the 21st century, it is the unrelenting onset of catastrophes that were largely unforeseen in scale over such short period of time.

3. The Consequences • The question of managing and financing extreme events is high on the agendas of top decision-makers in the private and public sectors (no less than 7 sessions in Davos) • With globalization of social and economic activities, risks are becoming more global as well – major interdependent effects • Demand is thus growing for high-level research by neutral institutions that can add value to businesses and evaluate public policy changes here and abroad

4. About us • Since its inception 27 years ago, the Wharton Risk Center has developed into one of the world’s most recognized centers for the study of catastrophe risk management, based both on its output and its global network of partnerships in the public, private, and educational sectors • Today, 50 faculty and doctoral students are associated with the Center’s activities

5. How We Do This Risk Center Education Research Business & Policy • Support of basic and applied research in human decision processes and risk management • Support of efforts to inform and shape business innovations and public policy • Support of education in the area of decision making at Penn, particularly at the doctoral level

6. Research:The Kinds Of Questions We Ask • Why do we fail to learn from disasters? Right after Hurricane Katrina Today

7. Is it possible to efficiently and equitably insure against large-scale terrorist attacks and man-made events that can have catastrophic consequences with unknowable odds?

8. What are the economic risks posed by climate variability, and how can we best adapt to more frequent and extreme climate-related catastrophes? What are the business opportunities?

9. Partnership with other Centers • IGEL/Wharton – environmental sustainability • Center for Leadership and Change Management– enterprise risk management • Harvard – nuclear/international security • Greater Philadelphia Innovation Cluster – risk and decision processes • LSE/Columbia/CMU – climate catastrophes

10. Business and Policy By developing diverse governmental and independent partnerships, the Center has played an active role in informing the debate over how escalating risk should be managed The World Bank

11. Business innovations and policy-oriented research

12. Roles in Washington • National Flood Insurance Program • (flood risk reform) • Natural Hazard Preparedness and Response • Terrorism Risk Insurance Act • (terrorism insurance reform)

13. Education Since 2005, the Center has used funds from its Ackoff endowment to provide annual research fellowships to doctoral students working on problems in decision making and risk management. In 2010, 23 fellowships across the Wharton School and the University of Pennsylvania were awarded.

14. More about the Wharton Risk Centerhttp://opim.wharton.upenn.edu/risk