Risk Assessment: Dynamic Events and Financial Risks

  1. Dr. Romney B. Duffey BSc, PhD, FASME scientist manager speaker Principal Scientist ASME Fellow past Chair active member1 and
  2. John W. Saull CEng, FRAeS, DAE aviation regulator executive director head member chairman2

Published Online: 31 OCT 2008

DOI: 10.1002/9780470714461.ch6

Managing Risk: The Human Element

Managing Risk: The Human Element

How to Cite

Duffey, R. B. and Saull, J. W. (2008) Risk Assessment: Dynamic Events and Financial Risks, in Managing Risk: The Human Element, John Wiley & Sons, Ltd, Chichester, UK. doi: 10.1002/9780470714461.ch6

Author Information

  1. 1

    Atomic Energy of Canada (AECL), Canada

  2. 2

    International Federation of Airworthiness (IFA), UK

  1. The learning curves for price reduction in this Chapter were first discussed in part in the paper by R.B. Duffey, Innovation in Technology for the Least Product Price and Cost A New Minimum Cost Relation for Reductions During Technological Learning, Int. J. Energy Technology and Policy, Vol. 2, Nos. 1/2, 2004.

Publication History

  1. Published Online: 31 OCT 2008
  2. Published Print: 24 OCT 2008

ISBN Information

Print ISBN: 9780470699768

Online ISBN: 9780470714461



  • risk assessment - dynamic events and financial risks;
  • future loss rate prediction - ships and tsunamis;
  • financial risk - dynamic loss and premium investments;
  • dynamic risk premium ratio;
  • loss ratio - industrial damage curve derivation;
  • Power Laws and Learning Rates;
  • Minimum Cost Equation (MCE);
  • learning rate b - value ‘elasticity’ exponent evaluated


This chapter contains sections titled:

  • Future Loss Rate Prediction: Ships and Tsunamis

  • Predicted Insurance Rates for Shipping Losses: Historical Losses

  • The Premium Equations

  • Financial Risk: Dynamic Loss and Premium Investments

  • Numerical Example

  • Overall Estimates of Shipping Loss Fraction and Insurance Inspections

  • The Loss Ratio: Deriving the Industrial Damage Curves

  • Making Investment Decisions: Information Drawing from the Jar of Life

  • Information Entropy and Minimum Risk

  • Progress and Learning in Manufacturing

  • Innovation in Technology for the Least Product Price and Cost: Reductions During Technological Learning

  • Cost Reduction in Manufacturing and Production: Empirical Elasticity, Power Laws and Learning Rates

  • A New General Formulation for Unit Cost Reduction in Competitive Markets: the Minimum Cost According to a Black-Scholes Formulation

  • Universal Learning Curve: Comparison to the Usual Economic Power Laws

  • The Learning Rate b-Value Elasticity Exponent Evaluated

  • Equivalent Average Total Cost b-Value Elasticity

  • Profit Optimisation to Exceed Development Cost

  • The Data Validate the Learning Theory

  • Non-Dimensional UPC and Market Share

  • Conclusions: Learning to Improve and Turning Risks into Profits

  • References