Xubin Zeng: Limited collaboration with academia is slowing development of cat models

A lack of collaboration between the (re)insurance sector and the academic world is slowing progress in the development of catastrophe modelling tools, according to University of Arizona professor Xubin Zeng.

Zeng, a professor of hydrology and atmospheric sciences at the university, said the industry needed to improve communication with academia if it is to develop a more sophisticated set of modelling tools.

Speaking to The Insurer TV, Zeng said: “We do not need to know all the details… but the more we know, the better we can help the industry. At the same time, I feel the industry probably has not paid enough attention to the academic world.”

However, he said there had been recent examples of successful collaborations, including those between the American Meteorological Society and the industry. He said there were signs interaction between the industry and academia was “getting better, but still not there”.

At a time when reinsurers are looking to refine models with more detailed information, Zeng said the industry should look for further collaborations to help make this happen.

He likened the need for collaboration to a ballroom dance, where “you need both partners in order to produce a waltz or tango”.

During the interview, Zeng provided an update on the 2022 Atlantic hurricane season, which officially started on 1 June and ends on 30 November.

The initial forecast from the University of Arizona – launched before the start of this season, on 14 April – pointed to 14 named storms, seven hurricanes and three major hurricanes.

The university updated its forecast to 15 named storms in June, maintaining its expectation for seven hurricanes and three major hurricanes.

Over the past week two of major forecasters - the National Oceanographic and Atmospheric Administration (NOAA) and Colorado State University - have both announced slight reductions in their expectations for the season.

NOAA’s latest forecast suggests between 14 and 20 named storms will form in the Atlantic Basin this year, of which 6 to 10 will become hurricanes and 3 to 5 major hurricanes.

CSU has said it now expects 18 named storms, eight hurricanes and 4 major hurricanes to form in the Atlantic this year.

Following these updates, the average forecast across all agencies tracked by The Insurer’s research team also suggests 18 named storms, ~8 hurricanes and ~4 major hurricanes will form in the Atlantic basin during 2023, in line with the CSU forecast.

To date, the Atlantic has seen only three named storms form with none reaching hurricane status, but activity is expected to ramp up over the coming weeks as we approach the peak period of the season.

Zeng reminded the sector that each season can bring unique challenges.

“The super-active 2017 season saw hurricanes Harvey, Irma and Maria, each becoming one of the 10 costliest hurricanes in history. Whereas last year saw just one peak storm - Ida - cause more than $70bn in damage.

“The message to the insurance industry is that while the overall level of activity can be important, sometimes it only takes one major storm landing in an important region to cause very substantial damage.”

During the interview, Zeng discusses:

- His expectations for the 2022 Atlantic hurricane season

- how the industry could better collaborate with academia

- the impact of climate change on hurricane season activity