The fundamental question that risk modellers ask has changed dramatically over the years, a speaker told attendees yesterday at Convergence 2022, presented by ILS Bermuda.

Jay Guin, executive vice-president and chief research officer, extreme event solutions, Verisk, said: “Catastrophe modelling has been around for 35 years.

“We have been consumed of thinking about ‘what’s the probability of a cat 4 making landfall in Texas?’, and I think that’s today not that hard to estimate. We have been at it for many years.”

But Dr Guin added: “The new question is different – what is the probability of a cat 4 making landfall in Texas, and then dumping 50 inches of rain over Houston?

“That’s a whole different, difficult question to answer. The reason for that is when Hurricane Harvey went and stalled over Houston, there was an atmospheric block that was preventing the storm from moving north or inland.

“So then the question is ‘what’s the probability of that block sitting there’?”

He said similar conditions occurred last year during floods in Germany.

Dr Guin added: “So, for us now it has become ‘how can we model those blocks, what’s the probability of those blocks occurring and interacting with these events’?

“So that’s where a lot of our time and energy is going.”

Dr Guin was speaking on the topic Trusting the Science: Forecasting for Today, Not Tomorrow.

He was joined as a presenter by Mark Guishard, director, Bermuda Weather Service, and Peter Dailey, head of research, Aeolus Capital Management.

The scientific experts shared their expertise on weather events and modelling for the current climate conditions, considering worst-case scenarios versus realistic scenarios to help attendees understand and reforecast where we are now, rather than the future.

Dr Guin said there was a recent trend of speaking of perils as primary or secondary, the latter of which include wildfires and floods.

But he said: “My message to you is this – nothing is secondary or primary.

“This is risk, so let’s take it seriously because, while we might get complacent that wildfires cannot cause more than $20 billion industry loss, yes, wildfires can cause a $50 billion industry loss.

“Fifty billion doesn’t sound like secondary to me.”

The conference at Hamilton Princess and Beach Club has attracted nearly 350 attendees from the alternative reinsurance, convergence and insurance-linked securities marketplace who have come together for the first time in three years for networking and education sessions.