Wicked Problems and Climate Change – The Future of Insurance

Image Source: REUTERS / Daniel Munoz

Exploring Wicked Problems with Design Thinking

Last year, along with Jonathan Hoss and Karen Maxwell, I looked into the topic of flooding in Australia. The project was focused on using design thinking to identify and begin to solve wicked problems that were arising through climate change.

Wicked problems are deeply complex problems where the stakes are high enough that it is dangerous to be wrong, and yet no solution is possible without raising a further “higher level” problem. Richard Buchanan defines them (read the full article here) with specific properties where there is always more than one explanation for why the problem exists and that there is no opportunity for prototyping potential solutions, therefore only a one shot opportunity for intervention.

The paper is fantastic as it discusses why designers tend to be drawn to these particular solutions, possibly actively revealing them through design thinking methodologies.

Wicked Problems Caused by Environmental Disasters

For the project Jon, Karen and I ended up exploring insurance, strange but true, as a topic where large issues were being raised that were placing pressure on a wide variety of stakeholders. As you can see in the presentation below that sets up the project, specific regions in Queensland; Roma and Emerald, were so heavily affected by the floods that the insurance company that paid out the most claims, Suncorp, then decided they would no longer support ongoing coverage without mitigation against future damage being developed. A wicked problem emerged as tensions between Government, Insurance Companies, Residents affected by the drought, and other Taxpayers where all at conflict over responsibility and appropriate calls to action.

The results include individuals with damaged homes being repaired at their own expense, all at high risk of repeat damage with no course for preventing it.

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Fast forward a year from the project, and there are only now beginning to be stirrings of a solution to the problem. The insurance embargo placed on the region has said to have worked, according to the insurance companies, by forcing the government to act. While nothing specific has happened just yet, it is very intriguing to be able to watch the issues arise when trying to solve a specific wicked problem.

Parallel to our project, Hurricane Sandy hit the shores of New York, causing far more damage economically. But the problems that arose have never quite scaled to the level of a wicked problem that could not be solved. While much debate is under way still about how best to manage future scenarios, clear action is being taken to mitigate future damage, whilst previous damage is being resolved. While I understand there are many homes yet to be fully repaired, and families still struggling to recover, there is a tremendous amount of proactive work being done to prevent future damage. Visit the USGS website and there is plenty of information about how data gathered will be used to predict storms and ultimately inform future projects.

Visually Communicating Context for Wicked Problems

At the end of the project I wrote a paper, where I was inspired by interdisciplinary research from Woods and Wreathall, who were using stress-strain graphs from material science to define and assess resilience in organizational systems. Their paper is available here. What inspired me was the idea of visually communicating why a problem generated by a given situation could be considered “solvable” versus “wicked”. In my argument I defined the New York disaster as a non-wicked problem, as the stresses did not exceed the resilient limit of the system. The system was able to return to a relatively similar state previous to the disaster, and therefore the problem solving efforts did not hit major contradictory tensions between stakeholders or criteria of success. The damage caused in Australia had so far exceeded to local resilience in the system, that a new failed state had emerged that had new criteria and tensions between active stakeholders that meant no single solution could be implemented without triggering further problems that could not be confidently predicted.

Below is the paper which was my first attempt at weaving these ideas together and heavily informed by the work and discussions with Jon and Karen, who are amazing by the way.

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Climate Change and the Future of Wicked Problems

This project continues to resonate with me as almost all issues related to climate change have some element of “wickedness” to them. The context of the problem is generally up for debate with arguments between doomsday predictions and conservative optimism. Specifically, insurance will be hugely affected if the cost of damages continues to increase and governments remain limited financially with how they can invest in mitigation efforts. As Jon pointed out, Toronto and the Ontario province of Canada has faced a surprising number of tornados this summer. It is possible for a debate to be raised around future weather proofing of homes to qualify for insurance, without it being clear who should truly be responsible for this upfront cost. It is clear that the big reinsurers, those who cover the insurance companies that pay direct to consumers, are well aware of the risks rising and are therefore hugely increasing premium rates.

All this makes the case for an ever increasing need for methodologies to foster discussion and decision making around long term situations. Tools to reveal and communicate the context of wicked problems are required and will hopefully be available for proactive preventative decision making. It also suggests that Urban Ecological Succession, a deep recurring theme for me, is integral to the future of our living systems.

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