Climate Change and Uncertainty in Catastrophe Modelling: Aligning UK Flood Risk Perceptions with Reality
Background
The catastrophe risk modelling industry supplies models to the insurance industry that estimate the probability of financial losses exceeding a certain threshold across different return periods. In 2021, The Bank of England published its stress test using scenarios which suggested that losses in UK floods could increase by up to 60%. Firms were asked to calculate their change in incurred losses in a future which included enhanced rainfall. While there was a perception that losses would rise, firms had very different views on the expected magnitude. These perceptions were informed by the quality of information available, including that of catastrophe models, their input data and other assumptions. The results are therefore highly uncertain and perhaps subject to systematic bias. Research is needed to understand how constraining uncertainty in future rainfall, flood mitigation, and market perceptions might drive catastrophe model users’ expectations of climate change risks.
PhD Opportunity
This PhD will test the assumption that changes in future climate will translate directly through to increases in insured losses. Working closely with Flood Re – a UK reinsurer set up in partnership with Government – you will investigate flood risk projections as presented by industry catastrophe models, critically assessing uncertainty associated with driving factors including:
1. Climate change (meteorological characteristics of extreme rainfall)
2. Exposure change (number or type of properties exposed to flood risks)
3. Market sentiment (expectations of insurers about risks which affect choices about premium pricing, or whether to offer insurance).
You will refine uncertainty in the above interactions through mathematical modelling to understand discrepancies (e.g. between different downscaled climate product flood risk outcomes) and incorporate flood mitigation measures such as nature-based solutions (e.g. tree planting) likely not accounted for by catastrophe model users or validators. You will engage with stakeholders to understand how climate risk perception (e.g. driven by media or markets) influences catastrophe model development, use and loss calculations. Addressing these issues will help Flood Re plan and promote affordable insurance for high flood risk UK households.
You will work at the intersection of climate science, data science and decision science to advance understanding of climate-driven flood risk and insured losses. Based @Leeds you will be supervised by Joseph Holden (hydrology), Erica Thompson (UCL, modelling & decision-making) and David McNamara & Manoranjan Muthusamy (Flood Re). You will develop an operational familiarity with flood risk and model evaluation, and spend time with Flood Re, gaining insurance sector experience & access to relevant catastrophe models. You would then be well placed to pursue an academic career, or move into consulting, catastrophe modelling, insurance, reinsurance or public policy.
Applicant Profile
The project will suit students with an interest in hydrology and climate change, with strong quantitative skills. The project will benefit those who want to apply those skills and gain more experience in using mathematical models for pragmatic decision support in public and private sectors. Some experience/background in any one or more of hydrology, flood modelling, meteorology, or climate modelling would be preferred.
Other information
Zanardo, S., Salinas, J.L. (2021) An introduction to flood modeling for catastrophe risk management. WIRES Water, 9, e1568. https://doi.org/10.1002/wat2.1568
Monger, F., Spracklen, D.V., Kirkby, M.J., Willis, T., (2024) Investigating the impact of woodland placement and percentage cover on flood peaks in an upland catchment using spatially distributed TOPMODEL. Journal of Flood Risk Management, 17, e12977, https://doi.org/10.1111/jfr3.12977
Neumayer, E. and Barthel, F., 2011. Normalizing economic loss from natural disasters: A global analysis. Global Environmental Change, 21(1), pp.13-24.
Paprotny, D., Sebastian, A., Morales-Nápoles, O. and Jonkman, S.N., 2018. Trends in flood losses in Europe over the past 150 years. Nature communications, 9, 1985. https://doi.org/10.1038/s41467-018-04253-1
Pulkkinen, K., Undorf, S., Bender, F. et al. The value of values in climate science. Nat. Clim. Chang. 12, 4–6 (2022). https://doi.org/10.1038/s41558-021-01238-9
Zhu, Q., Klaar, M. Willis, T., Holden, J. (2025) A quantitative review of natural flood management research. WIRES Water, 12, e1765. https://doi.org/10.1002/wat2.1765
