Business|Adults|Advanced|18. Insuring trade risk

Watch this short video and answer the questions

I lived on the sixth floor. The lifts were regularly out of order. I used to get up late for work I used to rush down the stairs with toast in mouth. I used to be always late for work. So I bought a mattress and placed it next to my car. I jumped off my balcony. I’m now unable to walk. I use a wheelchair. I’ve moved to a bungalow. I do not have a job. I’m therefore never late for work. I do not have to wait for a lift. I have a spare mattress.

1. Why is this video called «Intelligent Risk Taking»?

2. What does it teach us?

pic1_Business|Adv|L18

Read the situation and comment on it

You are about to open a restaurant.

For the following investments explain giving clear examples how these will reduce your risk of failure in your enterprising venture.

  • a market research study
  • a good location
  • a slick shop front
  • a top chef
  • radio advertising
  • good fresh ingredients
  • redecoration of dining room
  • lots of staff
  • live music
  • a publicity agent
  • discount vouchers

Answer the questions

pic2_Business|Adv|L18

1. What things do you and your family insure against?

2. What sort of things do big international companies need to insure against?


Listen to the text and, in as few words as possible, say what the main point of the article is

Internationalisation — risk or opportunity? by Torsten Jeworrek The internationalisation of the economy is not as recent as the buzzword «globalisation» would have us believe. In fact, it was internationalisation that paved the way for the beginnings of the insurance industry back in the fourteenth century, as shipowners sought to protect the increasing value of their ships and cargoes. Even today, the complex nature of risks emanating from international trade is one of the insurance industry’s most difficult challenges and one that affects all classes of business, as the following examples show.

1. More than 90 percent of all world trade is transported by sea or other waterways. The largest container ships today, with cargoes of up to 13,000 containers, may be worth far in excess of $1bn. However, even this concentration of value is small compared with that found at the world’s great container ports, such as Singapore or Hamburg, which act as depots to goods worth tens of billions of dollars every day.

2. The outsourcing of production sites to low-wage countries does not just reduce costs. It can also reduce the quality of the goods produced. Defective products can result in recall costs or even product liability costs. Recent examples of recalls that spring to mind include toys coated with lead paint and toothpaste contaminated with the antifreeze diethylene glycol.

3. Liabilitу losses can reach extreme proportions when pharmaceutical products cause dangerous side effects in patients. National law in the country where the products are sold plays a key role in this connection. The US, in particular, has seen some extremely high awards for damages.

Insurance companies that cover such large risks need a secondary market where they can place them. Reinsurers assume this function. Sharing the load among several carriers helps to spread the risks. The diversification effects achieved by spreading risks across different regions and classes of businesses allows reinsurance to balance their portfolios and realise a level of capital efficiency that enables them to cover their clients’ risks — and ultimately those of the insured — at a reasonable price. Extreme losses in the past show just how important the reinsurer’s role is. One of the biggest loss events in the history of insurance was on September 11, 2001. The attack on the World Trade Center in New York was a prime example of the complexity of today’s risks, with an accumulation of losses across a range of insurance classes such as fire, business interruption, liability, life and health, and compounded by significant capital market losses. The insurance of large and accumulation risks is a definite advantage for the sustainable development of economies. In countries where insurance is not verу far advanced, it is the vulnerable economics and above all the inhabitants that have to bear the brunt of these losses. The tsunami of 2004 not only brought immense human suffering but also caused losses of over $10bn. As the insurance density in the regions affected is still very low, the insurance industry only covered a small percentage of these losses, less than $1bn. Countries with an underdeveloped system of insurance suffer immeasurably from major catastrophes than those where a good part of the material losses can be covered by professional risk carriers. The global economy is increasingly networked and interconnected. Risks are becoming ever more complex, and the insurance industry has to develop new concepts for its clients in order to meet their need for risk cover in this changed environment.

pic3_Business|Adv|L18

Now read the article and answer these questions

Internationalisation — risk or opportunity?

by Torsten Jeworrek

The internationalisation of the economy is not as recent as the buzzword «globalisation» would have us believe. In fact, it was internationalisation that paved the way for the beginnings of the insurance industry back in the fourteenth century, as shipowners sought to protect the increasing value of their ships and cargoes.

Even today, the complex nature of risks emanating from international trade is one of the insurance industry’s most difficult challenges and one that affects all classes of business, as the following examples show.

1. More than 90 percent of all world trade is transported by sea or other waterways. The largest container ships today, with cargoes of up to 13,000 containers, may be worth far in excess of $1bn. However, even this concentration of value is small compared with that found at the world’s great container ports, such as Singapore or Hamburg, which act as depots to goods worth tens of billions of dollars every day.

2. The outsourcing of production sites to low-wage countries does not just reduce costs. It can also reduce the quality of the goods produced. Defective products can result in recall costs or even product liability costs. Recent examples of recalls that spring to mind include toys coated with lead paint and toothpaste contaminated with the antifreeze diethylene glycol.

3. Liabilitу losses can reach extreme proportions when pharmaceutical products cause dangerous side effects in patients. National law in the country where the products are sold plays a key role in this connection. The US, in particular, has seen some extremely high awards for damages.

Insurance companies that cover such large risks need a secondary market where they can place them. Reinsurers assume this function. Sharing the load among several carriers helps to spread the risks. The diversification effects achieved by spreading risks across different regions and classes of business allows reinsurance to balance their portfolios and realise a level of capital efficiency that enables them to cover their clients’ risks — and ultimately those of the insured — at a reasonable price.

Extreme losses in the past show just how important the reinsurer’s role is. One of the biggest loss events in the history of insurance was on September 11, 2001. The attack on the World Trade Center in New York was a prime example of the complexity of today’s risks, with an accumulation of losses across a range of insurance classes such as fire, business interruption, liability, life and health, and compounded by significant capital market losses.

The insurance of large and accumulation risks is a definite advantage for the sustainable development of economies. In countries where insurance is not very far advanced, it is the vulnerable economy and above all the inhabitants that have to bear the brunt of these losses. The tsunami of 2004 not only brought immense human suffering but also caused losses of over $10bn. As the insurance density in the regions affected is still very low, the insurance industry only covered a small percentage of these losses, less than $1bn.

Countries with an underdeveloped system of insurance suffer immeasurably more from major catastrophes than those where a good part of the material losses can be covered by professional risk carriers.

The global economy is increasingly networked and interconnected. Risks are becoming ever more complex, and the insurance industry has to develop new concepts for its clients in order to meet their need for risk cover in this changed environment.


1. How did the insurance industry start?

2. What do reinsurers do?

3. Why does the author of the article give two examples from the history of insurance?

Find words in the article which mean the following

pic3_Business|Upper-Int|L16

Internationalisation — risk or opportunity?

by Torsten Jeworrek

The internationalisation of the economy is not as recent as the buzzword «globalisation» would have us believe. In fact, it was internationalisation that paved the way for the beginnings of the insurance industry back in the fourteenth century, as shipowners sought to protect the increasing value of their ships and cargoes.

Even today, the complex nature of risks emanating from international trade is one of the insurance industry’s most difficult challenges and one that affects all classes of business, as the following examples show.

1. More than 90 percent of all world trade is transported by sea or other waterways. The largest container ships today, with cargoes of up to 13,000 containers, may be worth far in excess of $1bn. However, even this concentration of value is small compared with that found at the world’s great container ports, such as Singapore or Hamburg, which act as depots to goods worth tens of billions of dollars every day.

2. The outsourcing of production sites to low-wage countries does not just reduce costs. It can also reduce the quality of the goods produced. Defective products can result in recall costs or even product liability costs. Recent examples of recalls that spring to mind include toys coated with lead paint and toothpaste contaminated with the antifreeze diethylene glycol.

3. Liabilitу losses can reach extreme proportions when pharmaceutical products cause dangerous side effects in patients. National law in the country where the products are sold plays a key role in this connection. The US, in particular, has seen some extremely high awards for damages.

Insurance companies that cover such large risks need a secondary market where they can place them. Reinsurers assume this function. Sharing the load among several carriers helps to spread the risks. The diversification effects achieved by spreading risks across different regions and classes of business allows reinsurance to balance their portfolios and realise a level of capital efficiency that enables them to cover their clients’ risks — and ultimately those of the insured — at a reasonable price.

Extreme losses in the past show just how important the reinsurer’s role is. One of the biggest loss events in the history of insurance was on September 11, 2001. The attack on the World Trade Center in New York was a prime example of the complexity of today’s risks, with an accumulation of losses across a range of insurance classes such as fire, business interruption, liability, life and health, and compounded by significant capital market losses.

The insurance of large and accumulation risks is a definite advantage for the sustainable development of economies. In countries where insurance is not very far advanced, it is the vulnerable economy and above all the inhabitants that have to bear the brunt of these losses. The tsunami of 2004 not only brought immense human suffering but also caused losses of over $10bn. As the insurance density in the regions affected is still very low, the insurance industry only covered a small percentage of these losses, less than $1bn.

Countries with an underdeveloped system of insurance suffer immeasurably more from major catastrophes than those where a good part of the material losses can be covered by professional risk carriers.

The global economy is increasingly networked and interconnected. Risks are becoming ever more complex, and the insurance industry has to develop new concepts for its clients in order to meet their need for risk cover in this changed environment.


Complete these sentences with the words from the previous exercise

pic1|Business|Upper-Int|L20

Match the phrases and their meanings

Read the rules and do the exercise

pic4_Business|Adv|L18

1. If we want to amplify the quality an adjective describes, we use an intensifying adverb. These are some of the most common.

The presentation was really/ very good.

She’s dead certain to get the job.

The new design looks pretty good.

I was extremely surprised by her reaction.

She’s a thoroughly efficient organiser.

2. The relative strength of adverbs is shown on this scale:

Strong: absolutely, altogether, awfully, completely, greatly, highly, quite, terribly totally, very

Moderate: fairly, mildly, moderately, partly, quite, reasonably, somewhat

Weak: a bit, a little, marginally, partly, slightly

The whole thing is quite amazing.

The goods are reasonably cheap.

I was slightly surprised by what she said

Note that quite also means fairly:

The restaurant is quite cheap, but the food isn’t wonderful.

3. Intensifying adverbs modify adjectives that are gradable — that is, they can signify degrees of a given quality. Adjectives that are not gradable or identify the particular class that something belongs to are not normally used with intensifying adverbs. We cannot say:

a very unique idea

a fairly free gift

a very impossible solution

some slightly financial news

4. However, you can use an adverb such as absolutely or utterly with an ungradable or classifying adjective to show your strong feelings about something.

It doesn’t cost anything — it’s absolutely free.

The task is utterly impossible.


Tick the adverbs appropriate for each group

 

Complete these dialogues with a suitable adverb

Adverbs which strengthen adjectives Adverbs which soften adjectives
very

extremely

exceptionally

highly

increasingly

fully

incredibly

absolutely

severely

deeply

totally

superbly

thoroughly

quite

fairly

reasonably

slightly



Create short dialogues using some of the phrases below

Example:

— Last month’s sale figures seem wrong.

— I think they’re fairly accurate, but I’ll check if you like.

  • fairly accurate
  • incredibly well-prepared
  • absolutely awful
  • severely criticised
  • badly misjudged
  • deeply disappointed
  • slightly damaged
  • totally unrealistic
  • superbly presented
  • thoroughly enjoyed

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Look at the graph which shows sales of soft drinks produced by Kanko. Then choose the correct adverbs in the text

pic6_Business|Adv|L18

Change the highlighted adjective + noun phrases to the corresponding verb + adverb ones

Read the article and choose the correct alternative to replace the expression in italics so as to keep the same meaning

pic7_Business|Adv|L18

Expensive picture of extreme climate

by Sarah Murray

Images of the aftermath of the violent wind storms and tornadoes that swept across several US states this spring serve as a reminder of the damage caused by extreme weather events. Changing patterns are prompting many businesses to shore up their operations and facilities. However, many have yet to address longer term climate-related risks.

«Companies are looking at what should they do over the next few years to their infrastructure to increase the resilience of their operations,» says Antonia Gawel, deputy director of energy and climate at the World Business Council for Sustainable Development. «But that’s happening more than the longer term planning.»

Part of the reason lies in the difficulty of predicting weather patterns and the effects those might have far into the future. «The thing about the sea level rising is that you don’t really notice it,» says Paul Dickinson, chief executive of the Carbon Disclosure Project, which asks businesses to monitor their carbon emissions and publish the results for their shareholders. «But what does happen is that it causes an exponential increase in storm surge,» he says. «And if there’s a significant storm, you might find the sea inundating further inland than it would otherwise have done.»

This should prompt companies not only to establish procedures for staff during hurricanes or to fit their facilities with more durable roofs and windows. It might also mean redesigning global supply chains or changing industrial processes. Growing water scarcity is one reason to implement this type of planning. For companies that are highly dependent on water, this might mean relocating facilities or rethinking the location of new investments.

Whether it is tackling water shortages or shoring a business up against disruptions from severe storms, Ms Gawel emphasises the need to integrate climate adaptation into broader corporate risk management strategies that also cover areas such as terrorism, labour action or environmental legislation.

«When you’re taking an investment decision or looking to build infrastructure, it needs to be part of the whole due diligence and risk management package,» she says. «And it needs to bear sufficient weight within that decision-making process because, if it is just a standalone assessment, it might not have as strong an impact as it would if it were integrated into a true strategy process.»



Match the expressions to their meanings

Watch the video and mark the sentences True or False

Interviewer Interviewee

Interviewer: Tell me a little bit about «Eye-5».
Interviewee: «Eye-5» is an experiential staffing agency. We specialize in brand ambassadors and event models for nationwide activations, special events, product launches, and touring campaigns. We have four hundred independent contractors all around the country, we’re in any city, in every city.
Interviewer: How’s business?
Interviewee: Business is fantastic. We’ve actually had a lot of clients tell us that they work with the same talent through different companies but they work better when they booked them through us. I like to think that we do have a kind of an ad on the market just because of our relationships with the talent.
Interviewer: How many people in your office?
Interviewee: Three full-time not counting me.
Interviewer: Are you a micromanager?
Interviewee: Yes, but in a very positive way.
Interviewer: Why do you think that a micromanager’s a positive thing?
Interviewee: Well, define what you mean by micromanaging?
Interviewer: Well, actually, why don’t you define what you mean?
Interviewee: I mean basically making sure that all the i’s are dotted and the t’s are crossed.
Interviewer: So, are you dotting their i’s and crossing their t’s.
Interviewee: No.
Interviewer: So, they are able to do their job…
Interviewee: Yeah, they have all time.
Interviewer: What’s the biggest challenge that you have, financially?
Interviewee: Me being confident that our cash flow is where it is and our growth is where it is, that I can hire more employees full-time in the office.
Interviewer: What questions do you have for me?
Interviewee: I am habitually a very low risk taker.
Interviewer: Habitually low risk-taker.
Interviewee: Yes. I don’t take big risks but I think I have an opportunity that I am foolish to be passing out to not take the risk when I think I should be taking right now. I can’t get out of the mindset that I’m still ten years ago when I was bartering office space as a nanny, you know, just to have an office space.
Interviewer: And, so is the question — should you be taking the risk?
Interviewee: Yes, should I be taking the risk?
Interviewer: How long have you been in business?
Interviewee: Since 2002, so for 13 years.
Interviewer: You said you are risk averse, that was the first thing you told me.
Interviewee: Right.
Interviewer: I have to be honest with you. I don’t think you are. I tell you why. You take on all these clients all over the country in markets outside of where you live. You have 1200 contractors that represent you and your brand. That’s a big risk take. That is huge.
Interviewee: I gotta get an anxiety now.
Interviewer: Do you love your business?
Interviewee: I do. I love it!
Interviewer: Sometimes taking risks can put you in situations that will make you not love your business.
Interviewee: That’s what I’m afraid of is …
Interviewer: What if I fall out of love?
Interviewee: Yeah…I mean it’s already a big commitment. I mean I’ve spent so much of my life doing that and not doing other things.
Interviewer: You’ve given up a lot?
Interviewee: I’ve given up a whole lot.
Interviewer: Like what?
Interviewee: I’m very very happy but I always wonder what would it have been if I wasn’t working so hard if I got married and had kids. That’s the human wonder.
Interviewer: Both of us, right, have given up a lot for our careers, and being successful, and most people don’t like it when I say this — it has cost not having children, or not having friends, or not having a social life and so at some point you have to decide whether that cost is worth it or not. The question isn’t really whether you should take this risk really, is it? It’s what else do I really want to do in addition to this. Am I right about that?
Interviewee: Yeah… and I think maybe that’s how I view the risk, that I’m not necessarily risking my company if I decide to push it further. I’m risking my life.
Interviewer: It’s not just writing a check it’s I now have to give a part of my finger.
Interviewee: Yeah …
Interviewer: Forever. It’s gonna take more of your time.
Interviewee: Forever and so that’s the tradeoff. Really nice meeting you.
Interviewer: Thank you so much. I appreciate your time.


УрокУрок HomeworkHomework КурсКурс
  • Warm-up
  • Reducing the risk
  • Complex nature of risks - 1
  • Complex nature of risks - 2
  • Insurance vocabulary
  • Word partnership
  • Adverbs of degree
  • Adverbs in context
  • Adverbs of degree
  • Let's use adverbs
  • Expensive picture of extreme climate
  • Business risks
  1. 1. Business|Adults|Intermediate|1. Career moves
  2. 2. Business|Adults|Intermediate|2. Changing jobs
  3. 3. Business|Adults|Intermediate|3. Case study: Recruiting
  4. 4. Business|Adults|Intermediate|4. Describing companies
  5. 5. Business|Adults|Intermediate|5. Making sales
  6. 6. Business|Adults|Intermediate|6. Sales skills
  7. 7. Business|Adults|Intermediate|7. Partnership
  8. 8. Business|Adults|Intermediate|8. Working across the cultures. Revision
  9. 9. Business|Adults|Intermediate|9. New ideas
  10. 10. Business|Adults|Intermediate|10. Successful meetings
  11. 11. Business|Adults|Intermediate|11. Stress in the workplace
  12. 12. Business|Adults|Intermediate|12. Business owners feeling stress
  13. 13. Business|Adults|Intermediate|13. Participating in discussion
  14. 14. Business|Adults|Intermediate|14. Eating and drinking
  15. 15. Business|Adults|Intermediate|15. Corporate entertainment
  16. 16. Business|Adults|Intermediate|16. Organising a conference
  17. 17. Business|Adults|Intermediate|17. Doing business internationally
  18. 18. Business|Adults|Intermediate|18. New business
  19. 19. Business|Adults|Intermediate|19. Business ideas
  20. 20. Business|Adults|Intermediate|20. Suitable location
  21. 21. Business|Adults|Advanced|1. Good communicators
  22. 22. Business|Adults|Advanced|10. Working across cultures
  23. 23. Business|Adults|Advanced|11. What makes people successful
  24. 24. Business|Adults|Advanced|12. The greatest achievements
  25. 25. Business|Adults|Advanced|13. A sponsorship deal
  26. 26. Business|Adults|Advanced|14. Job motivation
  27. 27. Business|Adults|Advanced|15. Job satisfaction
  28. 28. Business|Adults|Advanced|16. Relationships at work
  29. 29. Business|Adults|Advanced|17. Taking risks
  30. 30. Business|Adults|Advanced|4. Marketing and partnerships
  31. 31. Business|Adults|Advanced|18. Insuring trade risk
  32. 32. Business|Adults|Advanced|19. Evaluating risks
  33. 33. Business|Adults|Advanced|2. E-mail: for and against
  34. 34. Business|Adults|Advanced|20. Working across cultures 2
  35. 35. Business|Adults|Advanced|3. The price of success
  36. 36. Business|Adults|Advanced|6. Going global
  37. 37. Business|Adults|Advanced|5. Marketing internationally
  38. 38. Business|Adults|Advanced|7. Describing relations
  39. 39. Business|Adults|Advanced|8. How East is meeting West
  40. 40. Business|Adults|Advanced|9. Building customer loyalty
  41. 41. Business|Adults|Upper-Intermediate|1. Brand management
  42. 42. Business|Adults|Upper-Intermediate|10. Case study 4: Relocation
  43. 43. Business|Adults|Upper-Intermediate|11. Cultural differences
  44. 44. Business|Adults|Upper-Intermediate|12. Case study 5
  45. 45. Business|Adults|Upper-Intermediate|13. Employing the right people
  46. 46. Business|Adults|Upper-Intermediate|14. Case study 6: Fast fitness
  47. 47. Business|Adults|Upper-Intermediate|15. Revision 2
  48. 48. Business|Adults|Upper-Intermediate|16. Free trade
  49. 49. Business|Adults|Upper-Intermediate|17. Training for Negotiating
  50. 50. Business|Adults|Upper-Intermediate|18. Right or Wrong?
  51. 51. Business|Adults|Upper-Intermediate|19. Ethics and Companies
  52. 52. Business|Adults|Upper-Intermediate|2. Building luxury brands
  53. 53. Business|Adults|Upper-Intermediate|20. Revision 3
  54. 54. Business|Adults|Upper-Intermediate|4. What business travellers want
  55. 55. Business|Adults|Upper-Intermediate|3. Case study 1: Hudson Inc.
  56. 56. Business|Adults|Upper-Intermediate|5. Case study 2: Solving problems
  57. 57. Business|Adults|Upper-Intermediate|9. Company structure
  58. 58. GE|Adults|Upper-Int|20. Business and advertising
  59. 59. Business|Adults|Upper-Intermediate|6. Helping companies to change
  60. 60. Business|Adults|Upper-Intermediate|7. Case study 3: Acquisition
  61. 61. Business|Adults|Upper-Intermediate|8. Revision 1: Polite "No"
  62. 62. IELTS|Adults|Advanced|Unit 3|2. Time for a change. Business and marketing