Making waves UCL tsunami modeling: insuring against the worst
20 June 2013
In March 2011, a Tsunami generated by one of the largest earthquakes ever recorded hit the east coast of Japan. Almost 16,000 people lost their lives. Cars, homes, hospitals, businesses and schools were swept away and the economic costs were vast.
Thankfully, natural disasters on this scale are rare – but it’s for this very reason that insuring against them is a difficult business. A recent EPSRC Knowledge Transfer Secondment between UCL’s Civil Engineering Department and insurance broker Willis has made great progress in predicting the losses from such events, making insurance against them simpler.
Professor Tiziana Rossetto from UCL’s Department of Civil, Environmental and Geomatic Engineering explained her work and its application in the insurance industry. “Willis is a re-insurer.
They produce insurance
products for governments, owners of industry etc. against all sorts of
different hazards, including natural hazards like tsunamis. Payouts are
based on complex risk calculations, but a reliable model for a tsunami
doesn’t exist yet, partly because it is quite a new science but also
because tsunamis are very rare, so there aren’t many measurements on
which to base calculations.
“We’re working on generating more empirical data about tsunami run-up – how far inland a tsunami might travel. We have a completely innovative pneumatic tsunami generator – a 45m wave flume – so we can model tsunamis in a laboratory and take measurements. This is unique worldwide. Using this, combined with analysis of other computations, we’re deriving better catastrophe models for tsunami insurance.”
Professor Rossetto explained the two projects that formed a basis for the Willis secondments, “We put forward two secondees. One was Ingrid Charvet, – who had just completed a PhD with me. Her work with Willis involved building a framework to assess the impact of extreme coastal events on financial risk and insurance models, using the tsunami generator to produce flood maps and model velocities. She analysed empirical findings against current modeling tools.
“The other secondee was Tristan Robinson, a teaching fellow who was doing a post-doc in this field. His objectives were to produce tsunami risk maps for Japan and to derive a tsunami risk index for the reinsurance industry. There are tools out there to numerically predict the likely extent of inundation, but they are not reliable. Tristan carried out numerical analysis using different programs, to see which ones would better fit observed data from Japan.”
Opening up knowledge
For UCL, the partnership has been extremely productive. Professor Rossetto said, “We tackled empirical and numerical aspects, as well as building fragility. Having two people allowed us to do a lot more within a year than we would have. It’s also helped us to better understand the insurance industry – they are usually very reserved about their products and the data they have.”
UCL is already part of the Willis Research Network, the world’s largest collaboration between public science and the financial sector, with a membership of around fifty leading research units. These secondments were part of this partnership, and served to highlight the expertise on offer at UCL.
Through Willis, UCL also had the opportunity to collaborate with Tohoku University in Japan, where researchers have been studying tsunamis in the aftermath of the 2011 disaster. During the secondment, Ingrid spent one month working with Japanese colleagues in Tohoku, resulting in the co-publication of a research paper.
Ingrid said, “The industrial contact helped to give direction and specificity to my research. Willis provided useful data, extended my international network of contacts and allowed me to gain insight into how they work and what their needs were, improving my understanding of the reinsurance industry and giving a more “applied” dimension to my research skills, which is both useful and motivating”.
For Willis, the partnership offers access to results from a unique tsunami model and to forefront expertise in the most accurate and usable computer programmes for tsunami risk computation.
Stuart Calam, Project Manager at Willis said, “The Knowledge Transfer Secondment scheme is a great way for industry and academia to work together on common aims and interests. This is one of the preferred ways in which the Willis Research Network funds research as embedding academics in a business environment has proved very productive for all involved. Willis have been proud to support the UCL secondees in their studies, whilst undoubtedly benefiting from the ability to tailor their research work towards practical applications for the insurance and reinsurance industry.”
Prof Rossetto concluded, “Making the link with Willis has been extremely useful for all concerned, both for strengthening relationships and for allowing all parties access to aspects of research that they would not otherwise have had.”