SUCCESS STORIES

Oasis

Oasis is a suite of tools and services that support catastrophe modelling and risk analytics to help understand and manage catastrophe and climate-related risk, and build resilience.

At its core is an open-source loss modelling framework, with plug and play features, that allows users to feed in a range of hazard, exposure and vulnerability data, to calculate damage risk and the potential financial cost of events. The loss modelling framework, demonstrated across fire, flood and city risk sectors, currently has 43 insurance members and over 60 associate members. Oasis aims to make these vital adaptation tools and services accessible to a wider audience around the world.

Key points

  • Understanding climate impacts and the associated risk is critical in dealing with extreme events and disasters
  • CAT modelling can support governments, cities and sectors in pricing the probability and severity of loss from climate-related risk
  • Current modelling is limited by a lack of transparency, and protected data sources that prevent a diverse view of a given risk
  • Oasis aims to improve understanding and management of climate-related risks, facilitate greater investments in insurance and risk reduction by providing access to transparent and standardised analytics
  • Oasis is building a global community of users, data contributors and modellers to decrease the cost of models and widen the use of CAT modelling
  • It is demonstrating its loss modelling framework in typhoon and storm surge, wild fires risk management and city flood risk and adaptation
  • Oasis’ 14 partners have received €3.9 million in funding from Climate-KIC since 2012
  • Climate-KIC has been able to act as high risk investor in adaptation service development, but in doing so, is stimulating innovation and interest in this vital part of the green economy

Project Background and Drivers

Understanding the impacts of climate change and planning for the associated risks is critical in dealing with extreme events and natural disasters. The Intergovernmental Panel on Climate Change (IPCC) predicts a rise in sea-level, increased discharge from rivers, increased groundwater and river abstraction with greater evaporation rates fuelling drought and extreme heat. These climate impacts are likely to precipitate disasters from wildfires and flooding to intense pressure on agriculture supply chains and healthcare systems.

Catastrophe modelling, with its origins in property insurance and the science of natural hazards from earthquakes and floods to typhoons and fires, can support governments, cities, sectors and companies in assessing and pricing the probability and severity of loss from climate-related risk. The unforeseen and unanticipated losses from Hurricane Andrew in 1992 and Hurricane Katrina in 2005 both catalysed the shift towards more sophisticated and reliable CAT modelling methods, highlighting a need for cooperation across the insurance sector, to avoid insolvency that could be detrimental, not just to the sector but to disaster recovery itself.

Today, changes in European and US regulation are driving increased transparency, requiring insurers and reinsurers to demonstrate a comprehensive understanding of risk. But, the sector still suffers from lack of transparency on how risks are priced. Until recently, commercial models have prohibited insurers and reinsurers from fully understanding how risks are quantified or from questioning underlying assumptions of the model. A narrow pool of data sources prevents a comprehensive and diverse view of a given risk – reducing overall understanding and reducing the capabilities of pricing appropriate insurance products. Furthermore, in the current competitive market, proprietary data and technology, with high upfront costs, make it technically challenging and expensive for users to incorporate them in different analyses and to maintain multiple software platforms. There is a need for standardisation.

The Role of Oasis in Adaptation Services and Building Resilience

Oasis is a suite of tools and services that support catastrophe modelling and risk analytics to help manage climate-related risk, and build resilience. At its core is an open-source loss modelling framework, with plug and play features that allows users to feed in a range of the type of hazard, exposure and levels of vulnerability data, to calculate damage risk and the potential financial cost of events. The framework provides a standard, meaning that users can access a fixed calculation tool, share assumptions, compare models and verify risk. The loss modelling framework has 43 insurance members and over 60 associate members across the insurance sector.

Expanding sectorial use of catastrophe and climate-related risk models

Oasis has been successfully demonstrating its loss modelling framework in three particular sectors – city risk adaptation, forest fires and honing in on the Danube area of Europe – and with considerable success. Future Danube is a multi-hazard, multi-risk model tailored to users in insurance, industry, finance and investment sectors and public authorities, providing trends and impacts. It has the potential to be used for mitigation and adaptation decision making.

City Climate Risk Adaptation creates damage, exposure and adaptation databases to assess the cost of action, and the cost of inaction of climate adaptation. Another demonstrator, Forest Fire Risk FP, is a geographical information systems (GIS) based fire risk mapping system to determine forestry risk level, fire impacts and risk reduction, supporting decisions on investment, forest carbon projects, logging and plantation and forest insurance. Other potential offers in development include an Asian typhoon and storm surge modelling service and a health planning tool that links hospital data in UK and Germany to climate impacts. This tool can aid service and resource planning, particularly over a longer horizon.

“What we see is that there are different risks with different magnitudes in different parts of the world,” says Tracy Irvine, Director of Oasis Hub and Oasis+ Programme Manager. “These all need specialist tools, data and models.”

Expanding Oasis

This loss modelling framework is complemented by a soon-to-launch open data and model eMarketplace, which will link demand for risk analytics with suppliers of data, models, tools and services. This will host and provide a commercialisation environment for global data and tools in the risk analytics space from many providers of free and licensed data, including specialist modelling companies, research institutes and academia.

It will also provide an environment for partners who have developed data and models through the Oasis framework to commercialise their data and products. “Because of the multiple partners, the team works

flexibly on innovating novel tools and services for potential customers, including city planners and industry. They can then release these models onto our eMarketplace for general use by other potential users if appropriate” says Irvine. “Because they will publish their modelling assumptions they can be used more transparently to assist city and regional planning and underwriting risk.”

Oasis also incorporates education and capacity building, through its research, academic and expert partner base. This encompasses model training and instruction on how to develop catastrophe models to the Oasis LMF standard, and how to use CAT models for adaptation planning.

By providing access to transparent and standardised modelling, Oasis aims to improve understanding and management of catastrophes and climate-related risks, and facilitate greater investments in insurance and risk reduction, making these vital adaptation tools and services more accessible to a wider audience around the world. It aims to open up new markets in different sectors, encourage new entrants and data contributors, helping to decrease the cost of models.

Irvine adds: “We’re using the loss modelling framework to democratise the world of risk assessment and data. It’s an opportunity for research institutes, businesses and governments globally to innovate with their data and in doing so make it become more useful. By sharing the data, they help improve the reliability and comparability of the models. Equally we aim to democratise the ability of sectors beyond the insurance sector to understand their catastrophe and climate-related risk, providing standards that create a common language around risk.”

Achievements

Oasis was endorsed in 2016 by The Global Innovation Lab For Climate Finance as one of four new financial instruments to catalyse billions of dollars for climate mitigation and adaptation in developing countries. Lab members include the Danish, Dutch, German, UK and US governments, Bank of America Merrill Lynch, Willis Group, development finance institutions, foundations, and other public and private investors.

Climate-KIC Support

Over the last four years, the Oasis consortium of research institutions and business partners have developed more than nine new climate, flood and forest fire catastrophe models for the market place and in doing so, have developed skills for the development of high quality CAT and climate models suitable for the market place. Partners include Imperial College London, ARIA Technologies, Technical University of Denmark, Delft University of Technology, Deltares, Potsdam Institute for Climate Impact Research, the Helmholtz Centre Potsdam, GFZ German Research Centre for Geosciences, ONFI International, Betterpoints, Pro Pannon, Municipality of Budapest and Budapest Sewage Works and Oasis Palm Tree.

Oasis has received €3.9 million in funding from Climate-KIC since 2012. The ability of Climate-KIC to act as a high risk investor in adaptation service development has helped stimulate interest in the role of CAT modelling in adaptation planning and risk management. Climate-KIC provided funding to Imperial College, which co-developed the Oasis LMF software kernel, and is now supporting the early development of the eMarketplace.

“We’ve come a long way since the original innovation project,” says Irvine, “but Climate-KIC investment gave us the ability to act as a serious and established consortium able to attract both commercial and leverage funding for programmes. Climate-KIC was the one prepared to take the risk to get this off the

ground. And all along the way, it has been a good critical friend. The CKIC collaboration formed as a result of their large network and we are now able to seriously innovate in in Europe and globally.”

By providing access to transparent and standardised modelling, Oasis aims to improve understanding and management of catastrophes and climate-related risks, facilitate greater investments in insurance and risk reduction, and make vital adaptation tools accessible to a wider audience

Tracy Irvine, Director of Oasis Hub and Oasis+ Programme Manager

 

For more information visit oasishub.co

 
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