Assessment of Catastrophe Risk in Industry

This paper describes the potential contribution of near-miss management systems to improving company profitability and reducing the frequency and severity of major industrial accidents. The near-miss concept has long been understood in both manufacturing and finance, as several examples in this paper illustrate. However, what has been largely missing is the integration of near-miss management into the culture and day to day operations in a manner that underlines the critical connections between near misses and behavior. Too often, near-miss management has been relegated to special staff or company-wide risk management committees, with the result that near-miss management has tended to play an ex post forensic role in risk management rather than the alerting role as a means of summarizing leading indicators and precursors of hazardous conditions. This paper describes several strands of recent research that aim to correct this and to make near-miss management an organic element of Enterprise Risk Management.