Periodic Reporting for period 2 - H2020_Insurance (Oasis Innovation Hub for Catastrophe and Climate Extremes Risk Assessment)
Periodo di rendicontazione: 2018-11-01 al 2020-10-31
Globally, there is an increased concern about the observed and potential impacts of extreme climatic events and the associated damage to human life, property and assets. The global reinsurance sector plays a major role in increasing societal resilience to disaster risks by providing reinsurance, that in turn supports risk transfer mechanisms in the form of private and state insurances. These insurances enable policy holders to protect against unforeseen disasters in the future and to enable a rapid recovery after the occurrence of such disasters. The need is paramount to adequately understand and compare climate related risks to assist decisions on insurance underwriting by the (re)insurance sector and levels of financing necessary for climate adaptation actions to reduce the vulnerability of our societies.
The overarching goal of the Oasis Innovation Hub for Catastrophe and Climate Extremes Risk Assessment Project (H2020 Insurance) is to support the understanding of climate risks by the (re)insurance sector and wider society. This will help decrease the gap between insured and uninsured losses caused by climatic hazards through providing an understanding of associated risks and to increase the uptake of insurances to cover new sectors and regions, with a focus on critical infrastructure, health, natural resources and supply chains to create greater financial resilience and enable societies to recover from extreme climatic events.
This project seeks to innovate a new open source standard for risk assessment, the Oasis Loss Modelling Framework, which enables the integration of multiple sources of data including environmental hazard, vulnerability and damage data, combined with financial information to provide a risk assessment of potential loss and damage caused by extreme climate and catastrophe events in a given area, that can be used by all sectors and encourage the extension of insurance penetration into new regions. In addition, the project intends to innovate the use of insurance style models and risk assessment methodologies to improve the understanding of disaster and climate risk throughout wider society.
The overarching goal of the Oasis Innovation Hub for Catastrophe and Climate Extremes Risk Assessment Project (H2020 Insurance) is to support the understanding of climate risks by the (re)insurance sector and wider society. This will help decrease the gap between insured and uninsured losses caused by climatic hazards through providing an understanding of associated risks and to increase the uptake of insurances to cover new sectors and regions, with a focus on critical infrastructure, health, natural resources and supply chains to create greater financial resilience and enable societies to recover from extreme climatic events.
This project seeks to innovate a new open source standard for risk assessment, the Oasis Loss Modelling Framework, which enables the integration of multiple sources of data including environmental hazard, vulnerability and damage data, combined with financial information to provide a risk assessment of potential loss and damage caused by extreme climate and catastrophe events in a given area, that can be used by all sectors and encourage the extension of insurance penetration into new regions. In addition, the project intends to innovate the use of insurance style models and risk assessment methodologies to improve the understanding of disaster and climate risk throughout wider society.
The project is proving the Oasis LMF system through undertaking a range of demonstrators linked and co-designed to ‘real’ situations that develop work around hydro-climatic risk in the Danube region (WP2.1.1 – 2.1.3); Typhoon Risk (WP2.2.1); African Agricultural Risk (through using climate information to support the underwriting of crop insurances; WP2.2.2); Climate services for the health sector (WP 2.3.1); Forest fire risk assessment (WP 2.3.2).
By mid-term of the project some exciting work has been achieved. In the first results, the project proceedings led to strong engagement and continuous exchange with key players in the (re)insurance industry, who have expressed strong interest in the proceedings and outcome of this project and indeed have become engaged in supporting the project with industry insight. Some key highlights of the project’s achievements so far are as follows:
• The Oasis Hub, our eMarket and the project’s main hub that assists us to make our data and products openly available to market was launched in 2017 and has already attracted over 950 members from a range of sectors interested in using climate services data and tools. Over 50% of the Danube Region Reinsurers have engaged with the hydro-climatic risk model in the Danube region – thus enabling it to potentially be developed into a full catastrophe model that can be trusted by Reinsurance Sector.
• Engagement with the Agricultural Risk Model has been strong by potential users in both the European and African Insurance sectors. Outreach has been particularly strong in Eastern Africa, where PIK have collaborated with a local TV channel to produce and broadcast an educative TV episode on climate change and crop insurance, which reached 8 million viewers across rural Kenya and Tanzania.
• Funding and investment has been attracted by a number of partners to expand and scale the work of this programme to other countries and making other earth observation data more available on the Oasis Hub.
• We submitted a response to the EU’s 2013 strategy consultation on adaptation to climate change aimed to make Europe more climate-resilient, focusing on three key objectives: promoting action by Member States, ‘climate-proofing’ action at EU level and supporting better-informed decision-making. The evaluation showed that the strategy has delivered on its objectives, however limited progress has been achieved in relation to the financial and insurance sector. The OASIS consortium submitted a consultation response supporting the need for more effort of collaboration which was picked up in the Commission staff working document of the evaluation.
By mid-term of the project some exciting work has been achieved. In the first results, the project proceedings led to strong engagement and continuous exchange with key players in the (re)insurance industry, who have expressed strong interest in the proceedings and outcome of this project and indeed have become engaged in supporting the project with industry insight. Some key highlights of the project’s achievements so far are as follows:
• The Oasis Hub, our eMarket and the project’s main hub that assists us to make our data and products openly available to market was launched in 2017 and has already attracted over 950 members from a range of sectors interested in using climate services data and tools. Over 50% of the Danube Region Reinsurers have engaged with the hydro-climatic risk model in the Danube region – thus enabling it to potentially be developed into a full catastrophe model that can be trusted by Reinsurance Sector.
• Engagement with the Agricultural Risk Model has been strong by potential users in both the European and African Insurance sectors. Outreach has been particularly strong in Eastern Africa, where PIK have collaborated with a local TV channel to produce and broadcast an educative TV episode on climate change and crop insurance, which reached 8 million viewers across rural Kenya and Tanzania.
• Funding and investment has been attracted by a number of partners to expand and scale the work of this programme to other countries and making other earth observation data more available on the Oasis Hub.
• We submitted a response to the EU’s 2013 strategy consultation on adaptation to climate change aimed to make Europe more climate-resilient, focusing on three key objectives: promoting action by Member States, ‘climate-proofing’ action at EU level and supporting better-informed decision-making. The evaluation showed that the strategy has delivered on its objectives, however limited progress has been achieved in relation to the financial and insurance sector. The OASIS consortium submitted a consultation response supporting the need for more effort of collaboration which was picked up in the Commission staff working document of the evaluation.
The H2020 Insurance project pushes the state of the art of climate risk assessment a step further in that it uses the first open source Loss Modelling Framework as the risk assessment tool for a range of climate related risks assessment scenarios. Previously these types of risk modelling tools were held within individual companies, thus the ability to compare the views of climate risks were limited. The scheme has been designed to innovate new risk scenarios e.g. a flood model that includes climate change risk assessment, a health algorithm which can help predict hospital admissions linked to lung diseases related to climate, a new methodology to assess local flood damage, a new land falling windspeed parametric assessment and forest fire scenarios are pushing the limits of our understanding of risk in these areas. In addition to this, the project brings together academia with the insurance sector, thus is developing an approach to codesign between these sectors.
A number of success stories highlight the project’s progress beyond the state of the art. As its potential and business model has already been recognized as highly promising by various stakeholders and government entities, this led to several parallel business and funding opportunities arising for further engagement. For example, the world biggest re-insurance company, Munich Re, recognized the potential of the business model and loss assessment methodology of the agricultural demonstrator, which led to a parallel pilot phase where together with the Munich Re, PIK and GAF AG are now developing business models with direct insurance companies in Eastern Africa and beyond.
Furthermore, the OASIS Modelling Framework has been adopted by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) for an international collaboration to improve climate and catastrophe risk resilience in the Philippines and Bangladesh using the Oasis open-source catastrophe modelling platform.
Initial impacts can also be indicated by the visitors and users of the Oasis Hub, in that it now has over 140 organisations with 1400 data sets on the site, with over 950 members and has had over 17,500 visitors to the site from 170 countries and 2020 downloads of datasets. The site receives peak traffic during emergencies, in particular during hurricane season and on other major catastrophe events.
A number of success stories highlight the project’s progress beyond the state of the art. As its potential and business model has already been recognized as highly promising by various stakeholders and government entities, this led to several parallel business and funding opportunities arising for further engagement. For example, the world biggest re-insurance company, Munich Re, recognized the potential of the business model and loss assessment methodology of the agricultural demonstrator, which led to a parallel pilot phase where together with the Munich Re, PIK and GAF AG are now developing business models with direct insurance companies in Eastern Africa and beyond.
Furthermore, the OASIS Modelling Framework has been adopted by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) for an international collaboration to improve climate and catastrophe risk resilience in the Philippines and Bangladesh using the Oasis open-source catastrophe modelling platform.
Initial impacts can also be indicated by the visitors and users of the Oasis Hub, in that it now has over 140 organisations with 1400 data sets on the site, with over 950 members and has had over 17,500 visitors to the site from 170 countries and 2020 downloads of datasets. The site receives peak traffic during emergencies, in particular during hurricane season and on other major catastrophe events.