Specialist flood risk modeller Fathom, and Reask, a climate analytics firm that leverages machine learning techniques, have partnered to create new, combined wind and flood risk models for re/insurers, banks, and ESG-focused investors.
Initially, this collaboration will see each company permitted to sell the other’s products and services to both new and existing clients.
However, starting next year, Fathom and Reask will look to introduce new hazard data maps and catastrophe risk models covering the combined perils of flood and wind – both of which have greatly contributed to increased losses for insurers, reinsurers, and insurance-linked securities (ILS) market participants in recent times.
Recent catastrophes, such as the flooding in Europe last July, have highlighted the growing impact of climate change on extreme weather events around the world. In light of this and the increased desire for responsible investments, the environmental element of ESG is now being discussed more and more at Board level, says Fathom and Reask.
The result, according to the two firms, is that re/insurers, as well as the broader financial services sector, have a “greater need than ever” to understand the combined risk of floods and wind events, and how the intensity of these perils will change and correlate in the future.
Dr. Andrew Smith, Chief Operating Officer (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.”
Reask’s Chief Executive Officer (CEO), Thomas Loridan, 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.”
Fathom, which was founded in 2013, and Reask, which was established more recently in 2018, are both well established in the risk transfer space, and report today that customers have welcomed the partnership.
“Vave has strong ties with Reask and Fathom. Both organisations share our commitment to scientific rigour and the championing of novel technology to underwrite complex risk. Best in class data is a critical element of our algorithmic underwriting platform and we’re looking forward to seeing the innovation this partnership will deliver,” said Marek Shafer, Managing Director at Vave, part of Canopius Group.