Flood risk modeller Fathom has partnered with Reask, a climate risk analytics firm specialised in atmospheric hazard models, to create combined wind and flood risk models.
This “strategic” partnership aims to provide insurers, banks and ESG-focused investors with an unparalleled view of risk data on the combined impact of flood and wind events, including hurricanes, tropical cyclones and typhoons.
This collaboration will initially enable each firm to re-sell the other’s products and services to new and existing clients, and from 2023 the two companies aim to bring new hazard data maps and catastrophe risk models to market, covering the combined perils of flood and wind.
They highlighted the increasing focus at Board level on the environmental element of ESG as recent events have proved the growing impact of climate change on extreme weather.
As a result of this, insurers and the wider financial services industry have a greater need than ever to understand the combined risk of floods and hurricanes, and how the intensity of both will change and correlate in years to come.
Dr Andrew Smith, COO and co-founder of Fathom, commented: “Fathom and Reask share the same values and approach. We’re working towards the same goals and have many shared customers so this partnership was an easy decision for us both.
“Both organisations are led by scientists, who are committed to being transparent and open about the data, methodologies and machine learning techniques that sit at the heart of our models. This shared ‘glass box’ approach means that risk professionals can understand the work our academics put in, and customers know they can trust our models.”
This announcement follows a Lloyd’s of London report published in February 2022 that identified the need for the industry to model the interrelated catastrophe risk of flooding and tropical cyclones.
Thomas Loridan, CEO at Reask said: “Cyclones bring heavy rains which cause floods. High winds cause tidal surges and large waves which increase coastal flooding – understanding the combined risk of wind and flood events will only get more important as we feel the impact of climate change.
“Fathom is a world leader in flood risk research and modelling, and we are proud to work with them to provide a new climate risk model that will benefit the insurance world and beyond.”