NSF Award
2413382
The planning process for a university-industry cooperative research center (IUCRC), the Center for Climate, Equity, and Resilience in CatModeling (CERCat), will take place with the goal of creating a two-Site IUCRC consisting of Rice University and Lehigh University. Its mission is to reimagine natural disaster/catastrophe insurance and develop it as a tool to protect vulnerable populations and ensure solvency of the insurance/re-insurance sector. Center outcomes will incentivize community disaster mitigation and promote climate change adaptation. It will shape the way engineers, scientists, land use managers, and governments model post-disaster recovery. Catastrophe models are an essential tool used by the insurance and finance sectors to assess risk and financial exposure. They are used to tune policies and portfolios in order for companies to remain solvent in the face of extreme events and the costs incurred. This Center will provide research and ideas that allow the insurance sector to continue providing policies and supporting the recovery of disaster affected communities and regions. University-faculty-driven ideas and research projects that address the insurance sector's collective needs are the focus of any IUCRC. The proposed Center will also include in its consideration critical elements that affect rate payers like social and environmental equity, community resilience, and planning and investment across multiple temporal scales. A Center, such as that proposed will deliver climate risk mitigation and possible means of community adaptation. Broader impacts of the Center include development of sustainable solutions to climate change that are paired with novel modeling techniques, insurance products, and technical approaches. It will also be an engine for catastrophe model workforce development as well as a much needed research engine from which insurance companies and their decision on policies and portfolios can be used to stimulate, incentivize, and help better determine risk and financial implications of natural disasters. The Center will formalize the catastrophe modeling field into a distinct academic discipline and create and provide its first formal, coherent educational program and curriculum. This addresses a serious industry need in terms of development of a skilled catastrophe modeling workforce.<br/><br/>Catastrophe modeling exists as a key discipline in the insurance and finance industries. It focuses on rare events and combines physics-based models with the limited data available for some natural disasters. The approach can be applied beyond natural disaster crises, however, to those in the financial sector, to political unrest, and to pandemics. The proposed Center for Climate, Equity, and Resilience in CatModeling (CERCat) will pursue a convergent educational and research agenda that generates new knowledge so the insurance and finance sectors of the economy can use Center project results to overcome hurdles in the sector's inability to adequately asses risk and the economic implications of climate-driven disasters brought on by rapidly changing and unexpected weather patterns. The Center will adopt a probabilistic approach to study natural disasters, with the purpose of computing expected losses, risk, and premiums. Faculty from a variety of disciplines at the two universities forming the Center (Rice University and Lehigh University) have coalesced with the purpose of addressing the impacts of climate and weather uncertainty on insurance and re-insurance companies and these sectors' abilities to provide a stable economic environment in which risk is sufficiently distributed and disaster outcomes can be reasonably well predicted to provide essential financial coverage for those needing to insure against catastrophic loss. Center research thrusts include examining feedback loops among the various models being used and using multidisciplinary investigations to tackle challenges of high impact and importance to the insurance/risk assessment sectors so they can create new and improved products and services. Center faculty and research draw expertise and insights from engineering, social science, data science, climate science, and economics. The Center's goal is to create and translate new concepts, tools, utilities, and algorithms from academia to private sector enterprises and government.<br/><br/>This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.
