NSF’s Ransom urges industry to join US agency-led initiative to improve climate models
All insurance-related companies are encouraged to take part in a forthcoming US federal initiative designed to improve climate and catastrophe models, according to National Science Foundation (NSF) program director Dr Barbara Ransom.
The effort is anchored by two agencies – the National Oceanic and Atmospheric Administration and the NSF.
The goal is to fund a new research centre that will be part of NSF’s Industry-University Cooperative Research Centers (IUCRC).
“It's not like any other centre that the Feds fund,” Ransom told The Insurer TV.
“[The] centre will help to address the serious crisis that the insurance companies are having and pulling out of various states because of their inability to predict the perils and really be able to assess risk in disaster-prone areas like Florida or California,” she explained.
Ransom said insurers had asked for help to better assess the impacts of weather and climate on society, but that federal agencies have only a limited ability to connect with industry outside of this program, which is one of the few able to directly consider industry needs.
“The insurance companies, reinsurance companies, the cat modelling shops, you know, they already have highly qualified people that are working like crazy to solve this problem. But in some ways, [the problem is] bigger than that,” said Ransom.
Since the advent of climate change and its effects, Ransom said cat models that look to the past to determine the future have become obsolete.
“What industry has done up till now is they've had these catastrophe models to say, okay, the past is a key to the future. We look at what happened in the past, like what the previous hundred-year flood lines look like, or how much precipitation you've had in any given area, or sort of the cycle of drought and extreme precipitation,” said Ransom.
“But because of climate change that has all changed. The past is no longer the key to the future.”
The initiative will form a newly created university centre dedicated to studying the complex problem confounding insurers and reinsurers.
But companies will have to pay a membership fee, expected to be about $50,000, to take part, according to Ransom.
Teams are actively still looking to interview companies to determine various areas of research the initiative will focus on, likely culminating in up to six study interests.
“And so if there is a company out there that would like to know more or would be willing to be interviewed by these teams to say, ‘hey, this is what we care about’, why don't you do something about it … that would be great, because what I can do is I can connect them up with the teams,” said Ransom.
Companies can also wait until the centre is up and running to join. All they have to do is sign a membership agreement that is uniform for all participating firms.
“You can't change a word in it. So I know how lawyers are. They always want to change things themselves. Well, they can't change it because we have thousands of companies that are in other US cities. Everybody signed the same membership agreement.”
There are also rules about how firms can use the resulting research. Ransom explains that no one company owns their investment, but they can utilise any intellectual property (IP) that results from the IUCRC research.
“Anybody who's a member of this centre basically has the IP. If any IP comes out of this, the IP goes to the universities. But every dues-paying member gets royalty-free, non-exclusive access to that IP. So they can take that in-house and then tweak it around. And then they have their own IP and they don't have to share that with anybody.”
Ransom said in the past, companies would often join these initiatives out of fear of missing out. They also like to connect with young post-doctorates and other researchers that will be working to solve industry problems within the framework of their business models.
“What the IUCRC model does, it allows those students to actually pick up those skills while they're working on projects that are actually being supported by industry.”
Watch the 18-minute interview with Dr Barbara Ransom to find out more about the program.