A new public-private consortium aims to develop protection against systemic risks

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The Cambridge Center for Risk Studies (CCRS) at the University of Cambridge’s Judge Business School is launching a new research consortium that aims to find ways to protect society from future systemic risks.

Funding will be provided by an international consortium of companies, including Pool Re, the UK mutual reinsurance company.

Research will support the creation and expansion of public-private market institutions and develop new risk transfer products and advisory services. These may include:

  • extensions of cover conditions for traditional insurance lines of business
  • new types of compensation or risk-sharing products
  • structured parametric bonds
  • corporate swimming pools
  • bipartite exchanges
  • other financial instruments

It will cover topics such as pandemics, cyber threats, geopolitical changes, financial crisis and climate change.

The research will enable the exploratory design of new financial instruments and assess their benefits, both in terms of return on subscription capital, but also in terms of potential consumer protection and societal benefits. Its results will enable members to better collaborate with public bodies – national and international – in the development of risk reduction policies, thus improving global cooperation in the reduction of systemic risks.

“We are honored to lead this private sector consortium – their guidance in guiding our research will be invaluable as we together create new private market risk management products and services,” said Dr. Michelle Tuveson, Executive Director and President. of the advisory board. at CRC.

“The COVID-19 pandemic has triggered the deepest economic recession of our history. Our policies, preparedness and financial responses need a significant overhaul if we are to better equip and protect society against the next major systemic risk that threatens our way of life,” commented Julian Enoizi, Pool Re Chief Executive and Sector Chairman. . consortium.

“Systemic resilience needs the foresight of systemic backstops that capital markets can respond to. Modeling to support new financial instruments will be key to dealing with future crises,” said CLS Chief Scientist Dr Andrew Coburn.

“GDP-sized government interventions have been the solution to pandemic-sized events, but government action on this scale is usually ad hoc – better regulatory and financial structures are needed to protect societies from the pandemic. ‘long-term erosion of wealth,’ said Professor Daniel Ralph, Academic Director at CLS.

Dr Trevor Maynard, Director of Systemic Risk Research at CTC, said: “We look forward to applying our world-class research techniques to test and scale up many of the proposed initiatives. This will advance our research into the causes, links and protective mechanisms of future systemic threats to society and the economy.

About the Cambridge Center for Risk Studies at the University of Cambridge Judge Business School

The Cambridge Center for Risk Studies is based within the Judge Business School at the University of Cambridge. The center works closely with business partners to solve complex problems in the science of risk management. This policy of deep commitment has enabled the center to develop relevant solutions for businesses. The center’s leadership combines academic excellence with industry experience.

About Pool Re

Pool Re is the mutual insurance sector to insure the risk of terrorism in Great Britain, created in 1993 by the British government. Pool Re exists to correct market failures, protect the UK economy and protect society and livelihoods from acts of terrorism. It provides a financial safety net for around £2.2 trillion in assets and businesses of all sizes.

Source: Cambridge Center for Risk Studies, Pool Re

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