10 The myth of human error

Can an individual trigger a catastrophe all by himself? Science questions this. Catastrophes are normally caused by a combination of unforeseen circumstances. The increasing complexity and networking of our global systems, which are pushing man's capacity to think and make judgments to its limits, also play a part.

One cigarette destroys 2,500 buildings

It is 1904, in Baltimore, and a lit cigarette is carelessly thrown away in the basement of Hurst & Company. Its burning embers start a fire which keeps the fire brigades of Baltimore, Washington, Philadelphia und New York at full stretch for over 30 hours. The fire spreads rapidly. Progress in fighting the fire is hampered by the fact that the hose couplings brought by the fire fighters from the neighbouring cities do not fit the water hydrants in Baltimore. In 1904, there were 600 different coupling systems in the USA. The immediate reaction of the National Fire Protection Association was to introduce a country-wide standard for hose couplings. 2,500 buildings were destroyed in this catastrophic fire and Baltimore became Munich Re's first major loss.

Can an unthinking smoker be responsible for a whole city burning down? Not according to statistics. Catastrophes occur when shortcomings, wrong decisions and chance coincide. It is 25 July 1956 and the Italian luxury liner Andrea Doria and the Swedish passenger ship Stockholm sail into a fogbank. The two captains each notice the other ship on the radar, but interpret the radar display incorrectly; both change course to avoid a collision, but achieve the opposite and a tragic accident results. Stockholm's bow drives into Andrea Doria's starboard side and tears it open almost down to the keel. The passenger ship sinks within a few hours at a cost of 51 lives. Munich Re pays out DM 900,000 (€460,000) in claims.

Strategy is not man's strong point

Technical progress also increases risk. Oil rigs catch fire, chemical plants produce poisonous clouds and ships are lost because of blind faith in technology. We evidently cannot cope with growing technological complexity and the interrelation of many individual risks. Professor Dietrich Dörner and his staff at the University of Bamberg's Psychology Institute have investigated how people behave in complex situations, how they take decisions and whether they follow certain patterns learned in the past. The result was horrifying. Most of our thought patterns lead inevitably to the wrong decision. Our capacity for thought evolved in an environment with a simple structure, which is anything but what we have today.

Chernobyl 1986: engineers shut down a reactor to perform a test, and in doing so violate a number of elementary safety procedures. On noticing that the system is becoming unstable, they attempt to raise power in the reactor. However, it is too late — it explodes. It almost seems that man has a tendency to adopt dangerous habits. As long as these habits have no negative consequences, he enjoys a deceptive feeling of security. In the course of the Chernobyl proceedings in 1987, 71 breaches of security regulations came to light. The potential for risk had been fully realised.

Megacities — a man-made risk

It is 17 January 1995 and the southern Japanese metropolis of Kobe is rocked by an earthquake measuring 6.9 on the Richter scale. Over 6,000 people are killed and economic damage is well over US$ 100bn. The earthquake was the most expensive natural catastrophe of all time. The huge concentration of values in megacities like Kobe creates risks of an almost unparalleled magnitude and complexity. Since the nineties, Munich Re has devoted a great deal of attention to this man-made risk. Numerous publications provide information on the risks and opportunities presented by megacities. You may wish to read our current publication on this topic, "Megacities — Megarisks", in which experts from Munich Re look at the risks in detail from an insurer's point of view.