Skip to content

The Willis Research Network

Willis Research Network
© NERC Satellite Receiving Station - University of Dundee 2013

Managing insurance risk by modelling windstorms

“Like buses, severe storms in Europe often come together, in twos or threes” says Stuart Calam, Programme Manager of the Willis Research Network (WRN), which was set up in 2006 by leading global risk advisor, insurance and reinsurance broker, the Willis Group.

Before the 2010 European windstorm project, the frequency at which severe weather events occur was not widely understood, so WRN researchers undertook a statistical study to model how these events impact on insurance risk. “The project identified that storms cluster and this has allowed companies to price insurance more accurately – something that has now been integrated into all industry risk models” Calam says.

Willis was persuaded that the sector needed greater academic input after a number of natural disasters, such as the 1999 cyclones, Lothar and Martin, which caused €8.5 billion of insured losses. Stuart Calam explains, “we recognised that our industry was not able to provide the information clients needed to manage their risk and we needed to improve our natural catastrophe modelling.”

Drawing on UK excellence in weather modelling, the WRN is now the world’s largest academic collaboration in the financial sector, with a membership of around fifty global research institutions.

Members of the WRN include UK and international universities: Oxford, Exeter, Imperial College, UCL, Reading and Princeton and the network has relationships with bodies such as the Met Office and NASA. The WRN funds 15 multidisciplinary research programmes, looking at a variety of natural hazards such as flooding and hail damage, as well as the largely unmodelled risks of volcanoes and landslides.

The ground-breaking European windstorm project was carried out with Exeter University’s Professor David Stephenson, in collaboration with the UK Met Office. Their statistical modelling showed that clustering is more likely to occur with intense cyclones and provided a method to retro-fit storm clustering into existing risk models. This will lead to better risk management and so reduce some of the huge losses that insurers have faced from extreme weather.

The WRN’s research has been valuable to the whole insurance industry, which is a particularly successful UK sector, employing around 315,000 people and contributing nearly £12bn in tax revenues in 2014.

Stuart Calam says “the expert input and thought leadership the network provides is going to be crucial in understanding how future weather patterns are changing, and what effect this will have on managing risk.” There may be many uncertainties in our current climate, but Willis is certain that its network of leading academics will help it to stay ahead.

Was this page useful?
Thank you for your feedback
Thank you for your feedback. Please help us improve this page by taking our short survey.