CASE STUDIES

Weather risks better understood and measured

We conduct weather research to understand short and long-term impacts across home, motor and commercial insurance products. This investment is absolutely necessary if we are to reach the best estimate of today's weather risk and then determine if weather risk is changing - and if so, by how much and how quickly.

Addressing weather risk traditionally involves reconstructing the observational record as far back as possible. In many cases, the historical record is only accurate for several decades. To better understand the nature of weather risk, we keep abreast of the latest scientific research from local and overseas research centres such as the CSIRO. We also jointly sponsor natural hazard research through Macquarie University in Sydney and Oklahoma University in the United States.

Our sponsored research at Oklahoma University often requires the use of very sophisticated climate models, taking many months to run. This research simulates climates where greenhouse gas concentrations are held constant at today's levels or adjusted to reflect future emissions projections. Over time, this research will guide us in knowing how quickly society needs to respond to climate change through adaptation and/or mitigation.

However, understanding the nature of weather risk is only one part of the risk equation. We must also understand the vulnerabilities of the property we insure. Again, we have acted in two key areas to address this issue - through the sponsorship of the Townsville Cyclone Testing Station and development of the IAG Hail Gun.

The Cyclone Testing Station advises industry and governments on building practices which could minimise damage caused by severe wind events. The IAG Hail Gun looks at identifying key vulnerabilities of different building materials to the impact of hail stones and how these vulnerabilities change with age.