Lloyd’s Science of Risk Prize Winners

Dr Charlotte Brown (Resilient Organisations) and the MERIT team (of which M.E Research Directors Drs Nicky and Garry McDonald are key developers) have been recognised in the 2021 Lloyd’s Science of Risk Prize. The aim of the competition is to raise awareness of research that has implications for the insurance sector. The team placed second in the Pandemics prize category for their work on ‘Accounting for business adaptations in economic disruption models’.

The capacity for businesses to adapt in the face of adversity has been clearly demonstrated through the COVID-19 pandemic, and the inadequacy of economic modelling tools to account for this adaptation is shown in economic losses and business closures significantly lower than predicted.

This research is the first of its kind to build an empirically-derived model of business impact and recovery following disruption and has important implications for the insurance sector.  For insurers to maximise their capacity to support organisations (and economies) through crises and to design policies that optimise benefits to their clients and return reasonable profit to insurers, risk models need to account better for the capacity of businesses to adapt.  The research paper provides both a method and a set of preliminary models that explicitly describe, in quantitative terms, how different sectors are affected by a range and combination of disruption types.

You can find a summary of the research and its relevance to insurance here: https://www.resorgs.org.nz/lloyds-science-of-risk-prize-winner/ . Further information about the MERIT team and their research can be found here: https://www.merit.org.nz/