STARTING UP B Are you a risk-taker? What risks have you taken?

l!J Which item i n each of the categories below carries the most and the least
risk? Explain why.
Travel Lifestyle Money Shopping
car drinking alcohol property on line
plane poor diet stocks and shares mail order
train smoking savings account private sales

ship jogging cash auction

B What sort of risks do businesses face (for example: financial risks,

environmental risks)? Can you give some examples?

B The verbs in the box are used when talking about risk. Check their meani ngs
Descri bing risk and put them under the appropriate heading i n the table below.

anticipate calculate eliminate encounter estimate evaluate ffiee foresee

gauge identify measure minimise prioritise reduce spread weigh u p

predict meet assess manage

face

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 UNIT 6 .... RISK

I] Match these sentence halves from newspaper extracts.

1 During the credit crunch, many a) the risks involved when sending staff to work
businesses ... in dangerous locations.
2 We can reduce risk ... b) in order to advise insurance companies.

3 Trying to minimise risk ... c) involved in setting up a new business.

4 It is impossible to ... d) eliminate all risk when entering a new market.

5 It is difficult to foresee the risks ... e) faced the risk of running out of money.
6 Actuaries calculate risk ... f) by spreading our lending across more markets.
7 It is important to consider ... g) is an important part of business strategy.

B These adjectives can be used with the word rislc. Complete them with the
missing vowels.
1 sl_ght 6 mm -d 11 s _ g n _ f c - -nt
2 g r__t 7 h _g_ 12 mm n nt

3 m n sc 8 r-m t 13 s -b s t-n t
4 c -n s-d - r- b l 9 s - r --- s 14 t-r r-b l

5 p _ t - n t -- I 10 n _ g l _ g _ b l _ 15 t r m nd s

EJ Of the adjectives in Exercise C, which describe:

1 a high level of risk? a low level?
2 a possible future risk? a risk in the very near future?

II I n pairs, talk about the types and levels of risks facing some of the
following.
See the DVD-ROM � 1 your company /institution 3 your city/town/country
for the i-Glossary. V
2 a major company/industry in your country 4 a foreign country

IJ •0 co2.10 Listen to Steve Fowler, Managing Director of the Institute of Risk

Managing risks Management, and give one example of internal risk and one example of
external risk.

l!I �l» co2.10 Listen again and complete the chart.

information technology
fires
"'-
\ ___;·; ·······
supply chain
. . . . . . . . . . . .] \_
'-- �
(
Steve Fowler typhoons

changing social and

non-availability of
political pressures
reasonably priced credit

/
changing customer
demand
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UNIT 6 H RISK

II �i» co2.11 Listen to the second part of the interview. What are the five key
steps to risk management?

llJ �>l) co2.12 Listen to the final part. Which three examples does Steve give of
organisations or industries that failed to manage risk? What does he say
about each example?
Watch the
interview on
the DVD-ROM. II Look at the audio scripts on pages 1 58-159. Underline the key words and
phrases that Steve uses to structure his answers. Compare your answers with
a partner.

Insuring rJ Answer these questions.

trade risks 1 What things do you and your family insure against?
2 What sort of things do big international companies need to insure against?

I] Read the article on the opposite page q uickly and, i n as few words as
possible, say what the main point of the article is.

II Read the article again and answer these questions.

1 How did the insurance industry start?
2 What do reinsurers do?

3 How do the two examples of major losses in paragraphs 7 and 8 illustrate this quote?
'Countries with an underdeveloped system of insurance suffer immeasurably more
from major catastrophes than those where a good part of the material losses can be
covered by professional risk carriers.'

llJ I n your own words, summarise the key points in the numbered examples
(1-3) in the article.

II Find words i n the article which mean the following.

1 when the maker of a product is responsible for any injury that the product causes
(paragraph 4)
2 money that a court orders someone to pay to someone else (paragraph 5)
3 the collection of all policies held by an insurer (paragraph 6)
4 the total combined risks that could be involved in a single loss event (paragraph 7)
5 a terrible event that causes a lot of destruction and suffering (paragraph 9)

D Com plete these sentences with words from Exercise E.

1 They are being sued for . . . . . . . . . . . . by clients who they advised to invest in an insurance
company that went bankrupt.
2 The defect in her car caused the accident, and she is suing the company for product

3 The region was devastated by a natural . . . . . . . . . . . . .

4 It's safer to spread your liability by holding a . . . . . . . . . . . . of risks.

5 An . . . . . . . . . . . . of risk happens when there is a concentration of risks that might give rise
to very large losses from a single event.

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 UNIT 6 H RISK

AGENCY
m Without looking back at the article, match the words on the left to the

I�\.� lEAlA1t1J I
phrases on the right to make expressions.

�-
1 bear a) the way

I
2 spring b) the brunt
;,� ,q"'
�.,..;-,-�
�
11..�Y
-�
� .u �. � /� "le
�
�trfi,
·
3 meet c) to mind

�Y ·!IV� .,�r 4 pave d) the risks

' fHSURANCECOMPAHY 5 spread e) a need

LI M ITED
Qpltal
CJ Match the expressions in Exercise G to their meanings.
· £ 1.soo.0 00 . ··- ·--·-·· 1 immediately think of something
2 make it possible for something to happen in the future
3 suffer the worst part of something unpleasant
4 reduce the chance of a large loss by sharing risks

5 be good enough to do what someone needs, wants or expects

D I n the next 30 years, which types of risk do you think will become
a) more significant, and b) less significant?

Internationalisation - risk or opportunity ?

by Torsten Jeworrek
The internationalisation of the econ­ 35 to mind include toys coated with lead classes such as fire, business intcrrup-
omy is not as recent as the buzzword paint and toothpaste contaminated 10 t i o n , l i a b i l ity. l i fe and health. and
globalisario11 would have us believe. with the anti freeze diethylene glycol. compounded by s i g n i ficant capital
I n fact . i t was internationalisation that 3 Liability losses can reach extreme market losses.
5 paved the way for the beginnings of proport ions when pharmaceut ical The insurance of large and accumu­
the insurance industry back in the 40 products cause dangerous side effects lation risks is a definite advantage for
fourteenth century, as s h i powners in patients. National law in the country 1s the sustainable development of econ­
sought to protect the increasing value where the products are sold plays a omies. l n countries where insurance
of their ships and cargoes. key role in this connect ion. The US. i s not very far advanced, it i s the
10 Even today, the complex nature of in particular, has seen some extremely vulnerable economics and above all
risks emanating from international 45 high awards for damages. the inhabitants that have to bear the
trade is one of the insurance industry's I n s urance companies that cover so brunt of these losses. The tsunami of

most difficult challenges and one that such large risks need a secondary 2004 not o n l y brought immense
affects all classes of business. as the market where they can place them. h u m a n s u ffering but also caused
15 following examples show: R c i n s urcrs assume t h i s fu n c t i o n . losses of over US$ I Obn. As the insur­
l More than 90 per cent of a l l world 50 S h a r i n g the l o a d a m o n g several ance density i n the regions affected is
trade is transported by sea or other carriers helps to spread the risks. 85 s t i l l very low. the insurance industry

waterways. The l a rge t container The diversification effects achieved only covered a small percentage of
ships today, w i t h cargoes of u p to by spread i n g risks across d ifferent these losses. less than USS I bn.
20 1 3 .000 containers. may be worth far regions and classes of business allows Countries with an underdeveloped
in excess of $ 1 b n . However, even 55 reinsurcrs to balance their portfo l ios system of insurance suffer immeasur-
this concentration o f value i s small and realise a level of capital efficiency 90 ably more from major catastrophes
compared with that fo u n d at the that enables them to cover t h e i r than those where a good part of the
world's great container ports, such as clients' risks- and ultimately those o f material losses can be covered by
25 S i ngapore or Hamburg, which act as the insured - a t a reasonable price. professional risk carriers.
depots to goods worth tens of billions 60 Extreme losses in the past show just The global economy is increasingly
of doll ars every clay. how important the reinsurer's role is. 95 networked and i nterconnected. Risks

2 The outsourcing of production One of the biggest loss events in the arc becoming ever more complex .
sites to low-wage countries does not h i story of insurance was on September and the i n s u rance i n d ustry has to
30 just reduce costs. It can also reduce 1 1 . 200 I . The attack on the World develop new concepts for its clients i n
the quality of the goods produced. 65 Tracie Center in New York was a order t o meet their need for risk cover
Defective products can result i n recall prime example of the complexity o f 100 in this changed environment.

costs or even product liability costs. today's risks. w i t h an accumulation of

Recent examples of recal l s that spring losses across a range of insurance

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UNIT 6 �� RISK

• We can use adverbs to strengthen the meaning of adjectives.

Adverbs of The US has seen some extremely high awards for damages.
•
degree We can also use them to soften the meaning.
The report was slightly critical.
C) Grammar reference page 148

IJ Which of these adverbs strengthen the adjective which follow and which
soften it?

a bit entirely exceptionally extremely fairly fully highly increasingly

moderately quite rather reasonably slightly somewhat totally very

ll Complete these dialogues with a suitable adverb.

1 'What were your sales results like last year?'
'. . . . . . . . . . . . good. I made my targets with two months to spare.'
2 'What's your new CEO like?

'Extremely talented and . . . . . . . . . . . . intelligent. She brings out the best in people.'
3 'Do you really think we should invest in an . . . . . . . . . . . . volatile market?'
'Well, first of all we should stay calm and review what we already own.'

4 'What did you think of the H R Director's presentation?'

'To
be honest, I don't think she was . . . . . . . . . . . . prepared. She seemed to be reading it
most of the time.'
5 'Are you confident that the merger will go ahead?'
'. . . . . . . . . . . . confident, although we still need a few more meetings to sort out one or two
problems.'

B I n pairs, create short dialogues using some of the phrases below.

EXAMPLE: A: LQS't mo ritl-/5 5a le5 fi9ure5 5eem Wro09 .
B: I tl-iirik tl-iey're fa irly accurate, but I'll cl-ieck if you like.

fairly accurate deeply disappointed

incredibly well-prepared slightly damaged
absolutely awful totally u n realistic
severely criticised superbly presented
badly misjudged thoroughly enjoyed

IJ �>l) CD2.13 Following the brainstorming meeting i n U nit 2 (page 19), the
Reaching team meets again to finalise plans for the sales conference. Listen to the
authentic meeting and note down what they agreed about these items.
agreement
1 Location
2 Workshop activities
3 Dinner
4 Month

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 UNIT 6 •• RISK

l!I Match these expressions from the meeting to the appropriate heading i n the
Useful language box below. (Some headings are not used.) Use the audio
script on page 159 to check the context of each expression.
1 Now, just to sum up, we've looked at ...
2 ... I think it's a really great place ...
3 So can we all agree, then, that we go with Florence?
4 ... I think that most of the time we'll be spending indoors.

5 Now, what about the activities?

6 What did you come u p with, Carol, for the actual workshops?
7 I thought it might be a good idea to use role play ...
8 I think some kind of interaction is a good idea ...
9 OK, so we go with the workshops, then?
10 Well, I don't know about role plays, though.
11 ... I was thinking maybe something like, you know, a simple quiz ...
12 Exactly.

13 ... yeah, that's a brilliant idea ...

II You are managers of a national newspaper. Consider this situation.

One of your top foreign correspondents, Mike Harris, has been reporting on events in a
country at war. To get his story, he went behind enemy lines and was kidnapped. In the
operation to rescue him, one of the rescue team was killed and two were seriously injured.

Harris is known to be one of the best foreign correspondents in the world. However, he has
been widely criticised in the national press because of the 'unnecessary risks' he took to
get his story. He had been advised by local officials that it was extremely unwise to go into
such hostile territory, but he ignored their warning.

Hold a meeting to decide:

a) how to deal with the criticisms, which are harming your newspaper's image;
b) whether to discipline Mike Harris for his behaviour.

U S E F U L LANGUAGE

ASKING FOR OPINIONS DISAGREEING EMPHASISING

How do you feel about this? Hold on now, don't you think ... I don't want to repeat myself, but .. .
Do you have strong feelings about this? I can't go along with that. I'm sorry to go on about this, but .. .
What's your view on this? Sorry, I can't agree with you. I do think this is really important.

GIVING OPINIONS ADDING A CONDITION SUMMARISING

Well, I'm sorry to say, I think ... I agree, providing we can .. . So, we've agreed that ...
Well, unfortunately, we're going to We can do that as long as .. . I'll just sum up what we've agreed.
have to ... That's OK if ... OK, let me recap ...
I can't see what the problem is.
MAKING SUGGESTIONS
AGREEING What about if we ...
I think I agree with you there. How about ...
I couldn't agree with you more. I think we should / ought to ...
Absolutely!/Exactly!

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