DOI: 10.4324/9781003157571-5
4 Renaturalising sovereignty
Ex-ante risk management
in the Anthropocene
Kevin Grove
Introduction
In 1992, Ulrich Beck declared that one defining factor of risk society was the
non-insurability of risks. For Beck, the emergence of catastrophic risks such
as climate change impacts violated principles of calculability and transferability that had allowed insurers to commodify, price, and transfer risks.
Beck’s risk society thesis implicitly positioned excess as a limit of insurability: excessive earthly and technological forces could cause catastrophes on
previously unimaginable scales. In temporal terms, catastrophes exceed the
logic of actuarial calculation, given how they are unprecedented events that
cannot be predicted based on past occurrences. In spatial terms, catastrophes affect an entire population, an excessive impact that prevents insurers
from spreading risk throughout the population. From this perspective, the
relation between insurance and earth may appear straightforward: the earth
sets a ‘natural’ limit on insurance, because insurance cannot provide protection against potentially catastrophic earth system dynamics that are
becoming a more common occurrence in the Anthropocene.
However, while this earthly excess may indeed violate traditional forms
of actuarial and indemnity insurance, subsequent developments in risk
management, insurance and reinsurance, and capital markets have demonstrated the flexibility of insurance as an apparatus for governing uncertain
futures (Ewald 1991). Techniques, such as risk pooling, catastrophe modelling, parametric insurance, and weather derivatives, to name but a few,
have created new mechanisms for pricing and transferring risk that are
based on speculative and enacted forms of knowledge, rather than actuarial
and predictive knowledge. Over the past decade, critical insurance scholars
have detailed these new insurantial techniques and their biopolitical effects,
while drawing attention to the ways they invert key assumptions in Beck’s
argument. Critical analyses of weather derivatives, for example, demonstrate how these financial instruments generate value out of, rather than in
spite of turbulence (Cooper 2010; Martin 2007). Catastrophe models rely on
fine-toothed simulations of future catastrophic hurricane impacts to generate probability curves for loss events (Collier 2008). Paired with parametric
4 Renaturalising sovereignty
Ex-ante risk management
in the Anthropocene
Kevin Grove
Introduction
In 1992, Ulrich Beck declared that one defining factor of risk society was the
non-insurability of risks. For Beck, the emergence of catastrophic risks such
as climate change impacts violated principles of calculability and transferability that had allowed insurers to commodify, price, and transfer risks.
Beck’s risk society thesis implicitly positioned excess as a limit of insurability: excessive earthly and technological forces could cause catastrophes on
previously unimaginable scales. In temporal terms, catastrophes exceed the
logic of actuarial calculation, given how they are unprecedented events that
cannot be predicted based on past occurrences. In spatial terms, catastrophes affect an entire population, an excessive impact that prevents insurers
from spreading risk throughout the population. From this perspective, the
relation between insurance and earth may appear straightforward: the earth
sets a ‘natural’ limit on insurance, because insurance cannot provide protection against potentially catastrophic earth system dynamics that are
becoming a more common occurrence in the Anthropocene.
However, while this earthly excess may indeed violate traditional forms
of actuarial and indemnity insurance, subsequent developments in risk
management, insurance and reinsurance, and capital markets have demonstrated the flexibility of insurance as an apparatus for governing uncertain
futures (Ewald 1991). Techniques, such as risk pooling, catastrophe modelling, parametric insurance, and weather derivatives, to name but a few,
have created new mechanisms for pricing and transferring risk that are
based on speculative and enacted forms of knowledge, rather than actuarial
and predictive knowledge. Over the past decade, critical insurance scholars
have detailed these new insurantial techniques and their biopolitical effects,
while drawing attention to the ways they invert key assumptions in Beck’s
argument. Critical analyses of weather derivatives, for example, demonstrate how these financial instruments generate value out of, rather than in
spite of turbulence (Cooper 2010; Martin 2007). Catastrophe models rely on
fine-toothed simulations of future catastrophic hurricane impacts to generate probability curves for loss events (Collier 2008). Paired with parametric