As the far reaching impacts of COVID-19 continue to dominate thoughts and discussions, the risk landscape looks very different to how many imagined it at the beginning of 2020.
Yet in recent weeks we have also seen an upsurge in natural catastrophe events making the news.
The 2020 Atlantic hurricane season was expected to be a busy one, and on 18th September, we switched to the Greek alphabet having exhausted the usual list of 21 names. Warmer than average sea surface temperatures continue to create the right conditions for more tropical storms. Our feature piece on climate predictions highlights how improvements in longer term forecasts can improve our understanding of the impact of a changing climate.
Moving around the world, historic wildfire activity in California has been followed by huge blazes forcing thousands to evacuate their homes across parts of Greece, Spain and Italy. China struggled with incessant rain that is causing billions of dollars of damage and putting massive pressure on critical infrastructure. Two of our articles this quarter look at these so-called secondary perils and highlight the balance needed in risk management, response and resource decision making as economies and societies transition to a so-called “new normal”.
That balance is at the heart of the approach to our work with partners across the Willis Research Network, with a multi-disciplinary and interconnected approach to looking at risk. We continue to re-examine the risk landscape and complement our existing work to bring in new partners in emerging areas of interest.
- We are delighted to announce new partnerships with the University of Oxford Cyber Security Centre and the Wharton Mack Institute for Innovation Management looking at the cyber risk landscape and innovation within the corporate landscape.
- We are also pleased to highlight work done in conjunction with Airmic exploring the megatrends identified in its annual member survey and focussing on geopolitics and populism. If you prefer listening to reading, you can also find podcast episodes discussing the megatrends.
- This newsletter also features insights focussing on Japan. Seismic activity continues to be a dominant area of concern across the region and our partners at Temblor highlight the impact of swarm activity in the Tokyo area. We also look ahead to the rescheduled Tokyo Olympics with a cross-risk review of some of the key risks for the Games.
Finally, for many years Climate has been at the heart of the Willis Research Network with numerous WRN projects aimed at helping to understand climate risk. In September we were delighted to host (virtually) a multi-disciplinary group of 38 of our partner experts to focus in this area and provide fresh impetus to our work in this space. Over the coming months you will see a number of exciting initiatives in this space building on this workshop.
As always, please feel free to get in touch to discuss any of the topics in this newsletter or the broader work underway.
Hélène Galy
Managing Director
Willis Research Network
Table of Contents
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01
Climate predictions and how to use them
Newly released skilful five-year climate predictions are helping to provide seamless capability to assess weather and climate risks we face today, to decades into future warmer climates. Willis Towers Watson has been advising its clients on how to respond to the regulatory requirements and providing consultancy services through the suite of capabilities under Climate Quantified.
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02
Fanning the flames of wildfires: COVID-19 and climate change
Wildfires are an interesting lens to consider interactions between risks, which could make things much worse than standalone models predict, and failure to stress test this approach may not leave enough of a gap to stop or mitigate cascading effects. Pulling from perspectives from across Willis Towers Watson, it explores cascading, compound and interconnected risks, and how explicit understanding and acknowledgement of these interactions will support resilience.
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03
Flooding during a pandemic: multiplied impacts and a need for shared resilience
With COVID-19 continuing to dominate headlines and boardroom agendas, it is easy to forget that other hazards exist and continue to occur. Since the beginning of 2020, several major floods have impacted developed and emerging economies, causing a series of resilience challenges that stressed the supply chains needed to respond to COVID-19.
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04
Mind the aftershocks – the 2019 Ridgecrest earthquake sequence and implications for the San Andreas fault
Non-stationarity is not only a characteristic of climate-related hazards. Local earthquake risk is also thought to change spatially and temporally following recent activity in a region. This insight article from the Earth hub explores with Willis Re how they leverage collaborations with academic partners through the WRN to address such complex questions, in order to react to such industry challenges in an independent and rapid fashion.
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05
Magnitude-5.9 quake is the latest and largest in Tokyo seismic swarm
A number of magnitude-5.0+ shocks have struck greater Tokyo since April 1st, part of a larger swarm that extends north to Hokkaido, at a rate that is about three times higher than normal.
Note: this is a Japanese translated version of an original article written by Shinji Toda, Ph.D., International Research Institute for Disaster Science, Tohoku University, and Ross Stein, Ph.D., Temblor Inc, first posted on the Temblor website June 29th” and available here
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06
Tokyo 2021: The risks facing the Olympics
Since the revival of the modern Games in 1896, the Olympics have had to cope with a range of risks, from financial, security, sporting, and reputational to diplomatic incidents and war. In 2020 that list is expanded with the Tokyo Games postponed due to COVID-19. Bringing together thoughts from all our Hubs, this insight article provides an overview of different risks that may influence the Tokyo Olympics.
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07
Top risks and megatrends – geopolitics and populism
While the COVID-19 pandemic is primarily a problem of human health, it has carried inevitable consequences for geopolitics as well as domestic politics. The Willis Research Network and Geopolitical Risk team collaborated with Airmic on its annual member survey, to explore the impacts of geopolitics and populism on risk in the midst of the COVID-19 pandemic.
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08
European politics after COVID-19
How will the EU’s new recovery fund reshape the business and political risk environment in Europe? The European Council’s breakthrough recovery fund deal could have implications for business that are more far-reaching than you think. ‘European politics after COVID-19’ provides a vivid scenario narrative of how the compromises made at the summit (and after) could re-shape business risks and business competition in Europe. The Emerging Risks hub provided a view on the use of adverse scenarios and a lens-based approach to assessing risks.
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09
Mining Market Review 2020: Enhancing your ESG response
2020 represents a fundamental fork in the climate change road. The actions we take now, and in the coming years, may well determine the future of the world’s climate system. This is where the modelling of future climate scenarios using state of the art scientific knowledge can play a key role in strategic planning and risk management processes. The WRN collaborated with the Climate and Resilience Hub to highlight the need for risk managers to embed climate change as a financial and strategic imperative in the Mining Market. Mining Market Review 2020
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10
Market Review 2020: Exploring geopolitical
For the mining sector, exploring geopolitical risks is increasingly important because the industry is both reacting to and creating waves of its own. At a time when all eyes are turned to COVID-19, it has never been more important to look at the full risk landscape, as any one of these areas, if not managed correctly, can threaten the very viability and long-term profitability of projects.
- ‘Geopolitics of resources: prospecting threats to the mining sector’ challenges thinking associated with the changing political landscape, ESG trends, and digitalisation.
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- ‘Geopolitics of resources: prospecting threats to the mining sector’ challenges thinking associated with the changing political landscape, ESG trends, and digitalisation.
Future Events
- Subscribe to the Willis Research Network newsletter if you would like to hear about upcoming events.
- Pandemics under the microscope: using science for resilience
- 08 October 2020
- Organisations face no shortage of risks, yet pandemic modelling holds unique challenges compared to other perils. The SARS-CoV-2 pandemic (COVID-19) has shone the brightest of lights on the global need for improved understanding of and preparedness for communicable disease risk. The Willis Research Network is hosting a webinar with our new partner, Metabiota, to discuss how they use science to help businesses and countries build resilience to pandemics. Lucy Stanbrough and Dr Simon Young will be representing Willis Towers Watson.
- Earthquake science for (re)insurance decision-makers: bridging the gap between academia and industry
- 23 September 2020
- The Global Earthquake Model (GEM) foundation is a key Willis Research Network partner and has collaborated over the last few years on a number of initiatives to deliver earthquake risk assessment solutions for Willis Towers Watson clients. Dr. Marco Pagani and Dr Vitor Silva (GEM), will take us through recent innovative solutions developed by GEM, while Massimiliano Arizzi, Head of EMEA W/S Service Offering at Willis Re, and earthquake experts from Willis Re will describe how they leveraged outputs from GEM to help Willis Towers Watson clients and inform their decision making.
Previous Events
- North Atlantic Tropical Cyclones – do catastrophe models sufficiently represent ‘the storms of the future’?: recording available on request
Contacts
Head of Technology Risks Research
