Flood Re and Lighthill Risk Network back collaborative project to identify flood hazard research priorities
Research collaboration organisation Lighthill Risk Network Ltd (Lighthill) has announced its support for a major collaborative risk research project together with joint Government and insurance initiative Flood Re. The organisations have launched a report entitled ‘Flood Research Needs of the (Re)insurance Sector: Collaborating to Improve Risk Understanding and Management’ which compiles input from Willis Re, Guy Carpenter, Direct Line, Lloyds TSB, Aspen, Allianz, SCOR and Swiss Re to identify priorities for flood risk modelling.
Flood risk is a particularly challenging issue to model. Losses are rising and the risk is evolving thanks to trends such as urbanisation, more buildings in exposed areas, failed land use practices and climate change.
The report establishes a prioritised list of challenges and questions that the insurance industry has on flood risk modelling to feed into academic priorities and upcoming funding calls.
The highest-ranked research priority is vulnerability curves. (Re)insurers feel current damage ratios oversimplify the reality of damage distributions. This is followed by the correlation of rainfall/flood and windstorm hazards. (Re)insurers would like to assess the contribution of flood losses to wind events and vice versa.
Further results from the exercise will be distributed on 18-19 June at the at the London conference of not-for-profit catastrophe modelling platform Oasis Loss Modelling Framework.
Lighthill’s CEO Dickie Whitaker said: “We’re delighted to support this pioneering and collaborative initiative to prioritise and improve the (re)insurance industry’s understanding of and modelling for flood risk and its collaboration with academia. Compared to other sectors, (re)insurance has not been prominent on academic research spending. One of the roles of the Lighthill Risk Network in this initiative is to improve the linkages between academia and the (re)insurance Industry, aggregating large companies to help fund research and bridge this gap.”
Whitaker added: “We want to draw knowledge and innovation from academia into insurance and help improve flood model methodologies and development, as well as support end user validation of flood models and help to improve the accuracy of results through improved input data. Collaborating with key (re)insurers and Government insurance initiative Flood Re is critical to the success of this research project, which could have a global impact and transform the way we understand and manage flood risks, helping us to better mitigate these risks and model for them.”
Gary McInally, chief actuary at Flood Re, observed: “Our in-house experts, together with the team at the Lighthill Risk Network, have identified the key challenges that the (re)insurance industry is facing with modelling flood risk. Flood risk modelling and the production and use of related underwriting tools is challenging, but nevertheless essential for insurer understanding of risk and appropriate pricing of policies. We hope that this report will inform and encourage further research into how flood risk modelling can be improved, which will then help us and the wider industry to better understand flooding and support more people living in flood prone areas.”
*Access the report online here: https://lighthillrisknetwork.org/reports/