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Research carried out by Cairns (Maxwell Institute), Blake (Cass Business School) and Dowd (Nottingham, now Durham) in 2006 produced the `CBD' model for predicting future life expectancy. The CBD model and its extensions developed in 2009 by Cairns and collaborators have had a major impact on pensions and life industry risk management practices: multinational financial institutions [text removed for publication] and other stakeholders have relied on the CBD model to risk assess, price and execute financial deals [text removed for publication] since 2010. CBD is also used by risk management consultants to advise clients, is embedded in both open-source and commercial software, and is used by the UK's Pension Protection Fund to measure and manage longevity risk.
Starting in 2001, researchers from the Unit undertook a retrospective analysis of data from the Great Storm of October 1987 which led to them identifying and understanding a region of extremely strong winds within some storms. They termed these winds a "sting jet". In collaboration with the Met Office, the researchers developed ways to identify sting jets in current and imminent weather and, later, methods to forecast these extremely damaging events up to a several days in advance. These techniques are now used in the UK National Severe Weather Warning Service (NSWWS) and in European storm forecasts. Since the development of this new early warning capability, events have been too few to compile proper statistics; however, there is general agreement amongst the emergency services, local government officials and insurers that the improved warnings of extreme winds have saved lives, minimised disruption and generated considerable cost savings.
Research conducted within the Aon Benfield UCL Hazard Centre has underpinned the development of innovative extreme weather services for the real-time monitoring of global tropical storms and European extreme weather. These services have achieved significant commercial and humanitarian impacts worldwide. Within the REF impact period these impacts included £1.319 million of income generated by sales of commercial products; 24,000 subscribers receiving free storm alerts and/or seasonal forecasts; seasonal forecasts distributed to reinsurance companies worldwide; and a contribution to lives saved in Bangladesh from tropical storm Mahasen (2013). Twenty-two international organisations have also benefited from the commercial extreme weather services; for example, they support the claims division at RSA in assessing risk, allocating resources and detecting fraudulent weather claims; and they enable the Norwegian Hull Club to alert its portfolio of over 9,200 vessels worldwide to steer clear of approaching dangerous storms.
Research within the Unit was used to create the "TRACK" storm-tracking and analysis software package, which is used to automatically identify storms from both observed and simulated weather data. The software has been used in academic research to improve understanding of how storms develop and how they may change over time, but TRACK has also found widespread applications outside academia. It has been used to quantify errors in current operational weather forecasts, enabling users to produce more accurate storm forecasts better tailored to their needs. It has been used to develop catalogues of historical storms used in the insurance industry for risk assessment. TRACK has also been used to evaluate the performance of climate models and inform their development and improvement.
Research of Professor Brigo in the areas of credit risk, pricing models for the valuation of counterparty risk, and the development of accurate calibration methods of various credit risk models has generated significant impact both on public policy and on practitioners and professional services. His models were implemented and his calibration methods adopted in the financial industry. The significance attached to his work by the industry also resulted in a collaboration with the German regulator (BAFIN). Further evidence of his impact can be found in the fact that a Court of Law based its analysis in a financial intermediation case on Brigo's research.
Research by Cathcart, McNeil (both Maxwell Institute) and Morrison (Barrie & Hibbert) during the period 2008-2012 has developed a methodology based on least squares Monte Carlo to value complex insurance liabilities and manage their risks. This methodology has been adopted by Barrie & Hibbert (B&H, part of Moody's Analytics) and has enabled the company to develop an internationally leading proposition for valuing insurance products. This has generated £2.5M in revenue since 2011, through implementation in 5 new products and use in 12 new consulting projects.
Research by Reimer Kühn (RK) and collaborators has produced a framework to study and quantify the influence of interactions on risk in complex systems, including default risk in economy-wide networks of financial exposures. This work has had impact on practitioners and professional services dealing with financial risk, including research groups at central banks, who — partly in response to the recent financial crisis — have adopted such network oriented approaches to analyse and quantify systemic risk. The Financial Stability Division at the Bank of England has, for instance, developed refined versions of the network-oriented models proposed by Kühn and collaborators to specifically assess risk in the British banking system.
RVC's Veterinary Epidemiology, Economics and Public Health team (VEEPH) has been at the forefront of applying and evaluating new techniques for modelling disease risk, for policy and decision makers to use in surveillance and control of animal and zoonotic infections. Application of their recommendations, including European `Commission Decision' legislation, is contributing to ensuring that Europe remains free from African swine fever (ASF). The status of FAO Reference Centre in Veterinary Epidemiology, awarded by the United Nations' Food and Agriculture Organisation in 2012, recognises the RVC as a centre of excellence in this field and reinforces its role in guiding policies relating to animal health.
Improved flood risk modelling based on the application of research led by Keith Beven at Lancaster has had global impacts in improved flood defence policies and planning by governments, and in assisting insurers with their underwriting (for example in pricing and policy decisions). The benefits are not just financial — they are human too: improved understanding of flood risk and resilience protects life and assets, and has a positive impact on the well-being of many of those at risk. These impacts are at the centre of flood risk management across the UK, are being applied in nine other European countries, and now becoming the methods of choice for flood mapping in developing countries such as Thailand.
Research at Newcastle University into stochastic rainfall models and their application has transformed the practice of impact assessment of climate change and risk assessment of environmental hazards across multiple sectors. The Newcastle methods underpin the "Weather Generator", a web-based tool which has been made available since 2009 by DEFRA as part of their official UK Climate Projections (UKCP09). The tool's incorporation into this official data source means that the models generated underpin multi-sectoral risk assessment throughout the UK and subsequently have led to the adoption of stochastic methods in general, particularly in the water and insurance industries to produce more robust risk assessments.