Willis, a WTW business, announced a new scientific partnership with Cornell University and the Atkinson Center for a Sustainable Future focused on researching correlated natural catastrophe risks and their implications for the insurance and reinsurance industries.
The collaboration is funded through an initial one-year agreement by WTW and aims to provide insurers and reinsurers with new insights into how major natural catastrophes may become increasingly synchronized due to climate change.
According to the organizations, the insurance industry has historically relied on geographic diversification to reduce aggregate exposure to catastrophic losses under the assumption that major disasters are unlikely to occur simultaneously across multiple regions and perils. Existing statistical models have generally shown weak correlations between catastrophic events such as tropical cyclones, wildfires, and severe convective storms.
The research initiative will examine whether climate change is increasing correlations across natural catastrophe perils and will model the potential evolution of correlated catastrophe risks over the next one to five years.
The Cornell research team includes Dr. Jonathan Lin, Dr. Toby Ault, and Dr. Flavio Lehner from the university’s Department of Earth and Atmospheric Sciences, with support from the Atkinson Center for Sustainability.
The project will combine climate science, atmospheric modeling, large ensemble simulations, and physics-informed statistical analysis with Willis’s catastrophe analytics and insurance industry expertise.
WTW said the findings are intended to help insurers and reinsurers better understand evolving climate-related catastrophe exposure and improve long-term resilience planning and capital management strategies.
KEY QUOTES:
“In a changing world, we can’t afford to look only in the rearview mirror. Geographic diversification has served the insurance industry well in the past, but if catastrophes become more correlated, that strategy will no longer be valid. Our partners at Cornell will help us determine the true risk of correlated catastrophes in the present day and get prepared for the possibility of greater synchrony in the near future.”
Scott St. George, Head Of Weather And Climate Research, Willis Research Network
“Understanding how multiple natural perils may align in a warming world is becoming increasingly important for reinsurers, who have traditionally modelled the risk from different perils independently. By combining Cornell’s cutting-edge research with Willis’s deep industry experience, we can give our clients clearer visibility into evolving catastrophe risks and support more resilient decision-making.”
Cameron Rye, Director Of Natural Catastrophe Analytics, Willis Re
“We’re excited to work with WTW to translate cutting-edge climate and atmospheric science into actionable insights for the insurance industry. Our research has shown that to accurately assess correlated risks in a changing climate, one needs to account for the chaotic nature of weather through large ensemble simulations and physics-informed statistical analysis. By combining our expertise in drought research, climate variability, and hurricane risk with WTW’s industry knowledge, we can better prepare for the complex climate risks of the future.”
Prof. Toby Ault, Associate Professor, Department Of Earth And Atmospheric Sciences, Cornell University
