Faced with the increase in natural disasters caused by climate change, insurance companies must change their working methods and no longer simply analyze past events, but find new skills in the face of the unknown.
“The classic insurance company approach is to produce statistics, to look at what happened in the past, at these losses that we have compensated, and to reproduce it in the future,” explains Simon Blaquière, director of reinsurance, natural risks and technical projects at Generali.
Insurance companies employ actuaries who use math, statistics and data to model the future in ways that help companies manage the financial impact of the risks they insure.
“Historically, the role of the insurance company has always been to rely on the past, that is, on history, on data, and of course that remains important, but today the changes are such that we have to look ahead and try to predict.” explains Frédéric de Courtois, deputy director of the French insurance company Axa.
For him, “we live in a world of poly-crises”, that is, “both the multiplication of crises and the fact that these crises are correlated”. To answer this, one of the solutions is to “invest ever more in human capital and new skills: with meteorologists, with sociologists, with experts in different fields”.
The Italian insurance company Generali, for its part, created the Generali Climate Lab in France in 2015 with the aim “to better control, better understand, better analyze, better prevent climate problems”, explains Simon Blaquière, who also heads this lab. .
This has a multidisciplinary team of about ten people, among whom “you will find the classic functions of insurance with actuaries, +data scientists+ to process the data”, but also “much more scientific profiles on climate science: hydrologists, water engineers, cartographers “, even people who have studied political science “who were able to work in administrations”, according to Mr Blaquière.
– Assign a price to risks –
The German reinsurer Munich Re, which insures the insurers, “hired its first meteorologist in 1974, and today the company employs around 30 experts, segmented by type of risk, such as storms, earthquakes and other natural disasters,” explains Tobias Grimm, climate expert at the reinsurance company.
“My task, together with my colleagues, is to assess the risks associated with natural disasters around the world,” he explains.
In effect, this means that “we put a price on these risks – whether it’s a volcanic eruption, a landslide, a drought or a hurricane. We have to classify and quantify these risks. This forms the basis for actuaries who integrate this information into in risk models and that will ultimately determine the price that the customer sees in their contract,” adds Mr Grimm.
Because “not only are these new skills important and for us it is important to be able to recruit them, but the collaboration between these different skills is (a) key element”, states Mr de Courtois.
The actuary remains very important, but what is even more important “is to bring everyone around the table to be able to analyze and have a future vision”, adds the deputy CEO of Axa.
Insurance companies and reinsurance companies also rely on academic research.
The Axa Research Fund “also gives us access to the latest innovations, to the work of universities and researchers and to understand how these risks will develop, how our profession will change,” recalls Mr de Courtois.
Within Munich Re, too, “of course we work in close collaboration with the academic world,” assures Mr. Grimm. “Many universities, PhD students and professors look at different aspects of natural disasters. We are in contact with many of them, collaborate on research projects and integrate this knowledge into our models,” he continues.
The Generali Climate Lab welcomes three PhD students working on drought, the impact of storms and hail modelling, respectively.
published on October 20 at 9:38, AFP
