16th April 2009

Short summary
In March 2005 there was a major explosion at the British Petroleum (BP) Texas City refinery. Fifteen people were killed, many more were injured and the costs were considerable. Subsequent investigations found inadequate safety procedures and equipment. BP settled the claim, accepting full responsibility for the accident.

The Texas City explosion is one of the more extreme examples of the cost of human error to businesses. On the employee side this failure can be either intentional or unintentional. On the side of the company it can be a combination of (1) selecting and hiring employees of the right profile; (2) ensuring safety procedures and safety cultures are sufficient and effective; and (3) providing correctly functioning working capital and equipment.

Equally, while the human factor can prove a huge business cost, collaborative human effort can achieve astonishing results. The efforts of US Airways 1549 flight crew brought the stricken plane safely down in the Hudson River in January 2008, saving 155 lives.

Understanding the role of human failure in claims and when writing policies is of great interest to major (re)insurance players. In order to better understand some of the latest research on the human factor, Swiss Re hosted a Risk Talk on the subject. Karlene H. Roberts, Professor, Walter A Haas School of Business, University of California, Berkeley, Trevor Shaw, Head of the Human Factors Corporate Topic Group, Health and Safety Executive and Charles A. Scherbaum, Associate Professor,Department of Psychology, Baruch College, spoke on different aspects related to human factors. For the panel discussion with the audience they were joined by Bernd Wilke, Senior Risk Engineer, Swiss Re.