ROBUST - Enabling better management of UK multi-hazard risk

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The UK is severely impacted by multiple weather-related hazards, particularly flooding and extreme winds. The winter of 2015-16 illustrates the UK's vulnerability to such weather extremes, with estimated costs of £1.3-1.9 billion (EA, 2018). High-profile reports by government agencies now recognise that risk might be exacerbated when flooding and extreme wind co-occur, but at present most major UK sectors (e.g. insurance, critical infrastructure) consider most high-impact weather risks as independent phenomena. Progressing from studies of single storms and seasons, I was the first to demonstrate a systematic link in the UK between wintertime flooding and extreme winds (Hillier et al, 2015), even if floods and damaging winds typically occur in different storms (De Luca & Hillier, 2017). This relationship is not well understood, but it may reflect the way in which such storms interact with the jet stream (Hillier & Dixon, 2020). My recent work is based around estimating losses and communicates its findings using plots familiar to insurers (e.g. of probability vs loss), making implications more accessible than the outputs reported in standard scientific papers. Consequently, it is recognized as important, but another step is needed to alter financial practice; to quote a senior risk manager at Lloyd's of London, a person with in-depth knowledge of these hazards - "It's good work, but how do I use it?". ROBUST is a response to that question. Specifically, the Prudential Regulation Authority, a division of the Bank of England (BoE) that regulates UK financial services asked me exactly the same thing. Their concern is to ensure that the UK's financial service companies, such as insurers, are resilient to the impacts of natural disasters. In this role they need to decide whether or not to require insurers to hold more capital to pay the bill for larger than expected natural disasters. However, holding more capital costs insurers money, so the BoE do not want to impose this requirement unnecessarily. In response to this dilemma, I co-designed ROBUST with the Bank of England and Sayers LLP (a leading flood risk modeller) to understand the financial implications of this observed tendency for severe inland flooding and extreme wind damage to co-occur in wet and windy years. ROBUST's main aim is to enable the Bank to fulfil its need to deliver a statement on what regulation might be required. Our pilot study (Hillier, BoE, Aon, CatInsight) demonstrated that simply applying the scientifically observed correlation within statistical models of financial loss cannot reach a definitive answer - the assumptions needed create large uncertainties. Joint physical modelling of flooding and wind extremes is needed, driven by a climate model (e.g. the Met Office's UKCP18). However, this is not a simple endeavour, and then the BoE needs to extend it from hazard (e.g. flooding), to loss, and then to the implications of that loss. Perhaps this is why, despite being spectacularly illustrated by storms like Desmond in 2015, the association between flooding and extreme winds in the UK has lingered for a decade at the top of the insurance 'to do' list without being done. To solve the BoE's problem, ROBUST adopts a pragmatic, knowledge exchange approach, partnering with organisations including the BoE, Sayers LLP and the Met Office. It develops outputs from several existing UKRI funded projects on flooding (AquaCAT - Sayers) and wind damage (WISC - Met Office) to create a step-change in how we understand their co-occurrence, and then explicitly progresses to metrics suitable for decisions about the UK's financial stability. My skills and experience are ideal for this task. Moreover, to create wider impacts, I will promote cross-sector learning by taking the lessons about better management of UK multi-hazard risk gained with insurers and engaging with utility companies and transport infrastructure providers.