WTW partners with University of Geneva to assess global volcanic risks

WTW, a global re/insurance broker, has recently partnered with the University of Geneva to assess global systemic risks arising from large volcanic eruptions.

This collaboration aims to assist WTW and its clients in anticipating the potential impact of future large-scale eruptions on their operations and portfolios, enabling them to make more informed decisions for long-term risk management.

Massive volcanic eruptions have the potential to disrupt climate and societies on a global scale, as demonstrated by Indonesia’s Mount Tambora in April 1815, which triggered sudden global cooling, crop failures, and food price spikes.

Despite these significant consequences, WTW suggests that volcanic eruptions have not received sufficient attention from the risk management sector or the climate impacts research community.

Scott St. George, Head of Weather and Climate Research for the WTW Research Network, highlights the importance of addressing this oversight, stating, “It’s understandable people worry most about risks that are familiar to them. But volcanoes have been the leading cause of global climate disruptions for most of human history.”

In response, WTW and the University of Geneva are collaborating to quantify the risks associated with major eruptions over the coming decades and predict their impacts on extreme weather events, such as frost, floods, and droughts.

George emphasises, “Through this collaboration, WTW will gain unprecedented insight into the worldwide consequences should a Tambora-scale eruption occur in our future. The fact that many of those risks may not be insurable doesn’t mean we shouldn’t quantify them.”

Markus Stoffel, Chair for Climate Change Impacts and Risks at the University of Geneva, adds, “Natural proxies – such as tree rings or corals – and historical accounts provide ample evidence for the catastrophic consequences that past eruptions have had on food security and societal stability. The collaboration with WTW is to better apprehend the likely consequences of volcanic risks and on how to fully recognize these overlooked risks in the insurance sector.”

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