Physics-based models are emerging as an alternative way of assessing natural hazard risk rather than by historical records, a keynote speaker told the audience yesterday at Convergence 2024, the annual conference presented by ILS Bermuda.

Kerry Emanuel, a research professor at the Massachusetts Institute of Technology, said: “Climate change has already, I would say, rendered suspect historically based hazard models. I'm using suspect as a relatively gentle word here. I think it's worse than that.

“Atmospheric and climate modellers are starting to apply physics-based models to natural hazard risk and I think this is terribly important going forward.

“We need to do that. We need to get away from history, except that obviously it is a way of testing whether physics-based things actually work.”

He added that the insurance and reinsurance industry can help to accelerate this transition to a physics-based cat modelling.

Professor Emanuel’s keynote address explored the evolving relationship between climate change and extreme weather patterns, drawing on his pioneering research in hurricane physics and the importance of advancing meteorological prediction methods to better understand and mitigate future risks.

“I really have a strong feeling that most of our risk modelling is just not fit for purpose today. Most current risk assessments are really based on historical hurricane statistics. And the problem is … historical records, even if they were really good, are too short for purpose.

“But even if we had a long record that was good, it turns out to be a poor guide to the present. I'm not even talking about the future yet. Historical statistics, upon which most risk modelling is still based, are a poor guide to the present.”

He added: “And frankly, it frightens me that so much of what we do is based upon statistics that are really not fit for purpose today.

“Climate and weather researchers are getting more involved in trying to use their talents and the understanding of atmospheric physics to bear on the problem of risk.

“Government and your industries can, and to some extent do, encourage this development, but I personally would like to see a little bit more of that.”

The conference continues at the Hamilton Princess & Beach Club.