INTER-ACTION - 'Defining how we can act together to manage insurable risk'

Lead Research Organisation: Loughborough University
Department Name: Geography and Environment

Abstract

The UK is impacted by a variety of natural hazards such as flooding and strong winds; Storm Desmond in early December 2015 is a recent illustration of this. Regulation (e.g. building codes), government response (e.g. the COBRA emergency committee) and various agencies (e.g. Environment Agency) seek to mitigate the effects and manage efforts to respond, but with payouts of up to ~£1 billion per year the insurance sector also has an important and often under-estimated role to play. In essence, insurance is our means to spread the cost of rebuilding between citizens/organizations and across time to pay for the repair of assets (e.g. our houses). Providing such insurance reliably, accurately and fairly is underpinned by environmental science.

Typically, robust peer-reviewed science is done by academics, funded by government (e.g. by NERC), and is turned into tools such as 'catastrophe models' to assess risk by the insurance sector. This flow of information is, however, not perfect in a number of respects. This includes, but goes beyond, scientists not having a readily accessible list of current business-relevant questions from insurers that are phrased sufficiently tightly for them to work on. More fundamentally, noone in industry, academia or NERC has a full understanding of how, when or why NERC science is, or could be, used by insurers. Compounding this, academics must produce exciting original science, and it is proving difficult to create collaborations that are mutually beneficial and hit both targets - i.e., identified work must meet industry needs whilst also containing (or directly leading to) interesting world-leading science. This mismatch is global, but London's financial strength ideally places the UK to take a world-leading role in fixing it.

The purpose of this fellowship is therefore to facilitate better use of environmental science in insurance through better mutual understanding, co-working and collaboration, particularly by improving structures (e.g. a mixed academic-insurer NERC Guidance Panel, 'sandpit' project-creation workshops, protocols, a 'Data Sharing Network', a data 'hub', 'Urgency' NERC funding responsive to a business need) to better share information and co-design research.

The work of this fellowship will focus on 3 key aspects of the current position that I believe hamper efficient and effective interactions between the NERC's environmental science community and the insurance sector.

Firstly, and most fundamentally, in Strand 1 high-level workshops will be used to map (i.e. determine and report) how and why environmental science is produced for insurance, including how decisions are make and which scientific inputs are most useful. Then 'collaboration pathways', i.e. feasible, timely, and mutually beneficial routes from academic science to insurance decision-making, can be charted. Potentially, such insights could bring about a step-change in the effectiveness of science usage in environmental risk insurance.

To help this occur, Strand 2 targets a foreseeable key aspect in detail i.e., data-sharing. Legal issues, data security and simple inter-insurer competition are all potential barriers, but sharing data can be efficient in that it avoids duplication of effort and new access to data is an ideal incentive for academics. Existing expertise will be captured in a 'Data Sharing Network', whilst 3 mini-projects will focus a network of experts on creating viable practices and protocols, and also to demonstrate the feasibility of data sharing.

Strand 3 will work out how to best co-design research projects. Alongside established practice, it will test out innovative methods, for example exciting 'sandpit-style' meetings containing mixes of insurers and academics will held both in London and at a science conference. The proposed workshop titles 'Existing science, new problems' and 'Existing loss data, new science' illustrate that the mismatch will be tackled from both sides.

Publications

10 25 50
 
Description Key outcomes of the projects are as follows. Through social science research, the Fellowship has yielded three publications, from which the key messages are

(1) Individual scientists workload and incentive structures (i.e. 'publish or die') act a key barrier to academic-industry collaboration, although pragmatic ways can be found to partially mitigate this.
(2) In collaborating with industry it is challenging, yet vital, to identify mutual benefit in tasks that avoid yet complement established industry mechanisms to access science.

Through practice, in light of understanding gained in the research, the Fellowship has demonstrated that

(3) Through planning and being opportunistic, it is possible to put in place initiatives that have the ability to be mutually beneficial (e.g. the CENTA2-Lloyd's internship scheme)
(4) It is possible to initiate fixed-duration projects with elements of benefit to both industry and academia (e.g. TOGETHER with Bank of England/Hillier/Aon/AIR)
Exploitation Route Use the guidance (i.e. 'hints and tips') in 'Demystifying academics' to improve practice on the industry side and better support academics on the university side. So there is relevance to policy makers, management teams of universities, and industry.
Sectors Financial Services, and Management Consultancy

 
Description At present, the impacts of the direct taks associated with award (i.e. stated programme of work) are relatively limited and extend to raising awarenes of some of the issues around industry-academics collaboration broadly for a few 100 people, and more intensely for 10-50 (i.e. co-authors and attendees at the workshops). A few industry practitioners have fed back that they will be adopting suggestions and refining their practice, and feedback from KE professionals at the PraxisAuril conference was very good however this will be defuse and relatively hard to document. In it's first 12 months the 'Demystifying Academics' was the second most accessed paper in Geoscience Communications (1,275) with worldwide interest (see https://www.geosci-commun.net/2/1/2019/gc-2-1-2019-metrics.html), albeit this is a young journal with a limited number of papers. The new partnerships, joint projects (i.e. ~£1.5M of funding), opening lines of communication (e.g. AXA XL - NERC, Aon/AIR/Bank of ENgland) and other activities to facilitate interations between universities and the insurance sector are certainly useful, although hard to measure. The first clear economic impact was through Lloyd's, where the interships provided clear business value to them.
First Year Of Impact 2018
Sector Financial Services, and Management Consultancy
Impact Types Economic

 
Description Financial planning for natural disasters: the case of flooding risk in Central Java
Amount £269,918 (GBP)
Funding ID NE/R014361/1 
Organisation Natural Environment Research Council 
Sector Public
Country United Kingdom
Start 01/2018 
End 09/2019
 
Description Technology Driven Change and Next Generation Insurance Value Chains (TECHNGI)
Amount £1,195,345 (GBP)
Funding ID ES/S010416/1 
Organisation Economic and Social Research Council 
Sector Public
Country United Kingdom
Start 12/2018 
End 03/2021
 
Description OASIS as partner in the CENTA2 doctoral training center 
Organisation Oasis HUB Limited
Country United Kingdom 
Sector Private 
PI Contribution [2018] Hillier proposed Oasis / Lighthill Risk Network as partners for the CENTA2 doctoral training centre. In 2018 he introduced the idea to both parties, inititated introductions, acted as bridge and translator in a series of meetings, and will continues to support the relationship as it develops through the funding period 2019-2024. [2019] Oasis / Lighthill Risk Network are now established partners of CENTA2. Hillier was part of two PhD projects proposed with this partner as part of CENTA in 2019
Collaborator Contribution [2018] Engagement with the doctoral training centre, offering engagement with students in training, placements and co-design of research. Also, they will provide guidance to help make the research industry relevant. For JH's Fellowship, Oasis provided a platform for this investigation (i.e. a session at their conference) and expert guidance (i.e. an experience member of their staff) to beta-test the investigation [2019] agreed to co-supervise two PhD projects, to be filled subject to applicants winning the internal comepition for the places.
Impact The CENTA2 funding bid was successful.
Start Year 2018
 
Description Relationship with AIR 
Organisation Access Group Center for Research & Policy Analysis and Association for Institutional Research
Country United States 
Sector Charity/Non Profit 
PI Contribution [2019] In a developing relationship with these parties all have made in-kind contributions of time (e.g. analytical work, data) and knowledge; 4 main meetings for the 'TOGETHER' initiative within the Fellowship (Bank of England/AIR/Aon).
Collaborator Contribution [2019] In a developing relationship with these parties all have made in-kind contributions of time (e.g. analytical work, data) and knowledge; 4 main meetings for the 'TOGETHER' initiative within the Fellowship (Bank of England/AIR/Aon). Participation in KE Fellowship's guidance panel.
Impact None yet
Start Year 2019
 
Description Relationship with Aon 
Organisation Acharya Nagarjuna University
Country India 
Sector Academic/University 
PI Contribution [2019] In a developing relationship with these parties all have made in-kind contributions of time (e.g. analytical work, data) and knowledge; 4 main meetings for the 'TOGETHER' initiative within the Fellowship (Bank of England/AIR/Aon).
Collaborator Contribution [2019] In a developing relationship with these parties all have made in-kind contributions of time (e.g. analytical work, data) and knowledge; 4 main meetings for the 'TOGETHER' initiative within the Fellowship (Bank of England/AIR/Aon).
Impact None yet
Start Year 2019
 
Description Relationship with Lloyds of London 
Organisation Lloyd's Register
Country United Kingdom 
Sector Charity/Non Profit 
PI Contribution [2018] In a developing relationship with Lloyds both parties have made in-kind contributions of time and knowledge. [2019] In a developing relationship with Lloyds both parties have made in-kind contributions of time and knowledge again in 2019. This partnership has continued within the TECHNGI project. Also, JH instigated a first Internships programme for CENTA2 students at Lloyds with 2 4-week internships.
Collaborator Contribution [2018] In a developing relationship with Lloyds both parties have made in-kind contributions of time and knowledge. [2019] In a developing relationship with Lloyds both parties have made in-kind contributions of time and knowledge again in 2019. This partnership has continued within the TECHNGI project. Also, JH instigated a first Internships programme for CENTA2 students at Lloyds with 2 4-week internships.
Impact - A co-authored publication on university-business interaction i.e. 'Investing in science for natural hazards insurance' - Lloyds partnering a successful funding bid i.e. 'Technology Driven Change and Next Generation Insurance Value Chains (TECHNGI)' - Commercial value to Lloyd's from two successful internship projects in 2019, specifically desgined to tackle tasks of business interest.
Start Year 2018
 
Description Relationship with Willis Towers Watson 
Organisation Willis Re.
Country United Kingdom 
Sector Private 
PI Contribution [2018] In a developing relationship with WTW both parties have made in-kind contributions of time and knowledge. [2019] In a developing relationship with WTW both parties have made in-kind contributions of time (e.g. ) and knowledge again in 2019. Loughborough became a member of Willis' research network (WRN), and hosted the TECHNGI launch event as part of their WRN programme.
Collaborator Contribution [2018] In a developing relationship with WTW both parties have made in-kind contributions of time and knowledge. [2019] In a developing relationship with WTW both parties have made in-kind contributions of time (e.g. ) and knowledge again in 2019. Loughborough became a member of Willis' research network (WRN), and hosted the TECHNGI launch event as part of their WRN programme.
Impact - A co-authored publication on university-business interaction i.e. 'Demystifying academics to enhance university-business collaborations in environmental science' - WTW partnering a successful funding bid i.e. 'Technology Driven Change and Next Generation Insurance Value Chains (TECHNGI)'
Start Year 2018
 
Description Relationship with the Bank of England 
Organisation Bank of England
Country United Kingdom 
Sector Private 
PI Contribution [2019] In a developing relationship with these parties all have made in-kind contributions of time (e.g. analytical work, data) and knowledge; 4 main meetings for the 'TOGETHER' initiative within the Fellowship (Bank of England/AIR/Aon). Provided ad-hoc expert advice on shrink-swell subsidence for the PRA's 'General Insurance Stress Test 2019'.
Collaborator Contribution [2019] In a developing relationship with these parties all have made in-kind contributions of time (e.g. analytical work, data) and knowledge; 4 main meetings for the 'TOGETHER' initiative within the Fellowship (Bank of England/AIR/Aon). Participation in KE Fellowship's guidance panel.
Impact None yet
Start Year 2019
 
Description 1-to-1 (or small group) meetings with industry/UKRI 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact [2018] As part of the engagement exercise at the core of this fellowship, continuing contact with industry was envisaged and has taken place. In 2018 Hillier held 13 formally-organised 1 to 1 or small group meeting that were explicitly organised so that he might engage, albeit relating to various focussed objectives. These took place primarily in London, but also internationally (e.g. Zurich). Illustratively, in addition to preparing collaborations for the upcoming data sharing part of this project these (i) led to support for the successful TECHNGI funding bid, (ii) shaped the workshop Hillier led at the Oasis LMF conference, and (iii) initiated a dialogue between AXA and NERC about creating a standard procedure to lower the legal barrier to collaboration (e.g. standard templates/agreements).

[2019] As part of the engagement exercise at the core of this fellowship, continuing contact with industry was envisaged and has taken place. In 2019 Hillier organised 19 formally 1-to-1 or small group meetings. These took place primarily in London. Illustratively, these (i) facilitated Loughborough University becoming part of Willis' research network, (ii) form the backbone of a collaboration between the Bank of England, AIR and Aon on the correlation between flooding and wind damage in the UK.
Year(s) Of Engagement Activity 2018,2019
 
Description Attendance at meetings/conferences 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact [2018] Hillier attended a mixture of industry and KE related workshops, seminars and conferences for the purposes of networking, initiating contacts with key individuals, and raising awareness of the nature and purpose of this project. In 2018, a 5 conferences were atttended in various locations (e.g. London, Newcastle, Zurich).

[2019] Hillier attended and presented at mixture of industry and KE related workshops, seminars and conferences for the purposes of networking, initiating contacts with key individuals, and raising awareness of the nature and purpose of this project. In 2019, a 4 conferences were attended in various locations (e.g. London).
Year(s) Of Engagement Activity 2018,2019
 
Description Guidance Panel meetings for the KE Fellowship 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact [2018] The KE Fellowship guidance panel consists of 8 experts from industry (i.e. reinsurers, Lloyds, consultants), the World Bank and funding bodies (i.e. NERC). Hillier reports on activitiy ongoing, and advice facilitates future activity. For example, liasion with Oasis LMF for a workshop, for that dissemination by LinkedIn is most appropriate for the briefing note on funding science for insurance of natural hazards. This is a continuing conduit of interaction with the (re)insurance sector.

[2019] The KE Fellowship guidance panel has evolved with the project, now consisting of 11 experts from industry (e.g. Lloyds, consultants), and regulators (i.e. Bank of England). Hillier reports on activity ongoing, and advice facilitates future activity e.g. how to tailor the data-sharing investigations around tropical and extra-tropical cyclones.
Year(s) Of Engagement Activity 2018,2019
 
Description [2018] Convened session at EGU conference - Hydroclimatic extremes under change: advancing the science and implementation in hazard prevention and control (HS7.5) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact A conference session co-convened at an international academic conference, but with an re-insurer (i.e. Caspar Honegger of Swiss Re) and targetting a mixed academic/industry audience as the conference is big enough (>10,000 attendees) that both attend. To quote the abstract "This session aims to bring together geoscientists, risk management experts, and scientists working in the insurance industry". 4.5 hours of oral presentations for this session, with an additional 39 poster presentations. The session was flagged for media attention. Impact was largely in terms of awareness raising, which isn't on the drop down menu below.
Year(s) Of Engagement Activity 2018
URL https://meetingorganizer.copernicus.org/EGU2018/session/26629
 
Description [2018] Led workshop on 'How are own views of risk actually formed and used' at Oasis LMF annual conference 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact To collect industry views on how environmental science is used in the insurance sector, Hillier led a workshop on 'How are own views of risk actually formed and used'. ~40 practitioners contributed, with another couple of 100 made aware through the conference. It certainly sparked discussion in the networking sessions.
Year(s) Of Engagement Activity 2018
 
Description [2018] Ran session at Knowledge Exchange Network Meeting (Newcastle 26/6/2018) on 'Understanding Academics' 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact Hillier ran a session at NERC's Knowledge Exchange Network Meeting in Newcastle (26/6/2018), with a mixed audience of academics and industry practitioners interested in Knowledge Exchange. This was primarily to collect data on academics' constraints and motivations for the 'Demystifying Academics' publication. Through the workshop and co-authoring of the subsequent publication, both industy and academic colleagues reported changes in their views or of their awareness of various issues being raised.
Year(s) Of Engagement Activity 2018
URL https://nerc.ukri.org/latest/events/list/ken-nov18/
 
Description [2019] Convened session at EGU conference - Open Loss Data, Databases and data-driven Risk Transfer: Connecting insurance, academia and governments (NH9.17) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact A conference session co-convened at an international academic conference, but with a reinsurer (i.e. Gero Michel of Aon) and targeting a mixed academic/industry audience as the conference is big enough (>10,000 attendees) that both attend. 1.5 hours of oral presentations, with an additional 15 posters, and flagged for media attention.
Year(s) Of Engagement Activity 2019
 
Description [2019] Keynote talk at PraxisAuril annual conference 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact Hillier, J. K. (2019) Demystifying academics to enhance university-business collaborations as keynote speaker & part of panel discussion 'Supporting Impact & Knowledge Exchange - Stimulating supply to satisfying demand: researcher perspectives on Knowledge Exchange' at PraxisAuril's annual conference, Harrogate, 13th June. [Invited talk]. o Feedback very good, with audience indicating changed views and raised awareness.
Year(s) Of Engagement Activity 2019
 
Description [2019] With the TECHNGI project co-organised an event at Willis Towers Watson (London 26/11/2019) on Machine learning and the insurance sector 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact With the TECHNGI project co-organised an event at Willis Towers Watson (London 26/11/2019) on Machine learning and the insurance sector
Year(s) Of Engagement Activity 2019