Towards a Global Tropical Cyclone Risk Model

Tropical cyclones are amongst the most damaging natural hazards globally. With increasing globalisation, more and more insurance companies are writing business over several continents. This development shows that understanding tropical cyclone risk not only on a regional but also on a global scale is becoming increasingly important for the insurance market.

The Willis Research Network (WRN) combines the sources and knowledge of different areas within the global climate modelling and risk assessment community. Using the climate model track simulations from University of Reading/Met Office, GFDL and NCAR, Willis is building with the members of University of Exeter and University of Reading on an in-house platform to develop an extensive global understanding of tropical cyclone risk by assessing the relationship with historical losses. For that the direct damage potential of storms due to wind, surge and floods around the globe are investigated building on NCAR and Princeton University studies, as well as the indirect socio-economic impacts and related business interruptions estimated from experts within Willis, the Wharton School of Economics and CEDIM. This is the first initiative of its kind for developing a comprehensive understanding of tropical cyclone risk for the insurance industry.