The use of Environmental Science for decision making in Insurance
Authors: Glapiak Krescencja 
Published: March 2020

&lt;p&gt;EGU General Assembly 2020 &amp;#8211; abstract&lt;/p&gt;&lt;p&gt;&lt;strong&gt;&amp;#160;&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;&lt;strong&gt;The use of Environmental Science for decision making in Insurance &lt;/strong&gt;&lt;/p&gt;&lt;p&gt;&lt;strong&gt;&amp;#160;&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;Krescencja Podgorska (Glapiak)[1], Dr John K. Hillier[2], Dr Andreas Tsanakas[3], Dr Melanie King[4], Dr Boyka Simeonova[5], Prof Alistair Milne[6]&lt;/p&gt;&lt;p&gt;There is considerable global interest in evidence-based decision making. An example of this is the use of geoscience within (re)insurance for natural hazards (e.g. geophysical, meteorological). These cause economic losses averaging 120&amp;#8201;billion USD per year. &amp;#160;Modelling the risk of natural perils plays a vital part in the global (re)insurance sector decision-making. Thus, a 'model' comprising of a decision-making agenda/practices or software tools to form a 'view of risk' is a vital part of the (re)insurance sector&amp;#8217;s decision-making strategy. Hence, the (re)insurance sector is of particular interest to environmental scientists seeking to engage with business, and it is relevant to &amp;#8216;Operational Research&amp;#8217; studies as an example of a sophisticated user of complex models. Much is not understood about how such models shape organisational decision-making behaviour and their performance. Furthermore, the drivers for knowledge flow are distinct for each organization&amp;#8217;s business model. Therefore, it is crucial to understand how environmental science propagates into key decision-making in the (re)insurance sector. Specifically, the relative strength of the various routes by which science flows into decision-making processes are not yet explicitly recorded. This study determines how geoscience is used in decision-making in (re)insurance (i.e. to form a &amp;#8216;view of risk&amp;#8217;), with the practical aim of providing evidence that academic geoscientists can use when commencing or developing their collaboration with this sector. Data include the views from 28 insurance practitioners collected at a dedicated session in the Oasis LMF conference 2018, a desk-based study of the scientific background of &amp;#8216;C&amp;#8217;-level decision makers, and insights gained through co-writing a briefing note of the observations&amp;#160; with &amp;#160;industry co-authors and a representative of the UK funding body UKRI. We show that catastrophe models are a significant and dominant means of scientific input into decision-making in organizations holding (re)insurance risk but that larger organisations often augment this with in-house teams that include PhD-level scientists. &amp;#160;Also, the strongest route that exists for academic scientists to directly input is via the &amp;#8216;Model Adjustment&amp;#8217; function and technical specialists there (e.g. Catastrophe Risk Manager&amp;#8217;), but a disconnect is observed in that key decisions are seen as being taken in the &amp;#8216;Underwriting &amp; Pricing&amp;#8217; function or by senior management which require a further step to propagate the environmental science internally.&lt;/p&gt;&lt;p&gt;&amp;#160;&lt;/p&gt;&lt;div&gt;&lt;br&gt;&lt;div&gt;
&lt;p&gt;&lt;strong&gt;[1]&lt;/strong&gt; Doctoral Researcher, Geography and Environment, School of Social Sciences, Loughborough University&lt;/p&gt;
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&lt;p&gt;&lt;strong&gt;[2]&lt;/strong&gt; Senior Lecturer in Physical Geography, Geography and Environment, School of Social Sciences, Loughborough University&lt;/p&gt;
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&lt;p&gt;&lt;strong&gt;[3]&lt;/strong&gt; Reader in Actuarial Science, Cass Business School, Faculty of Actuarial Science and Insurance, CASS Business School, City, University of London&lt;/p&gt;
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&lt;p&gt;&lt;strong&gt;[4]&lt;/strong&gt; Lecturer in Systems Engineering, School of Mechanical, Electrical and Manufacturing Engineering, Loughborough University&lt;/p&gt;
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&lt;p&gt;&lt;strong&gt;[5]&lt;/strong&gt; Lecturer in Information Management, Deputy Director, Centre for Information Management Leader, KDE-RIG, Information Management at the School of Business and Economics, Loughborough University&lt;/p&gt;
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&lt;p&gt;&lt;strong&gt;[6]&lt;/strong&gt; Professor of Financial Economics, School of Business and Economics, Loughborough University&lt;/p&gt;
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