Climate Risk: emlyon and Groupama RAA Create a Research Framework to Support Decision-Makers
The research chair “Climate Risk and Property & Casualty Insurance” co-created by Groupama Rhône-Alpes Auvergne and emlyon business school, held its second scientific seminar on December 9. The event brought together researchers, insurers, financial stakeholders, and professionals exposed to climate risk. The goal? To share concrete findings and help inform organizations’ strategic decisions in the face of increasingly severe extreme climate risks.
A Research Chair Dedicated to Climate Risk Management
In an environment where climate hazards compound geopolitical and economic tensions, emlyon is making risk management a new core area of teaching and research.
Drought, clay shrink–swell: how can these risks remain insurable? Research conducted within the “Climate Risk and Property & Casualty Insurance” chair, created in 2023, focuses on insuring these climate hazards. In particular, it examines clay shrink–swell, a phenomenon that weakens buildings and infrastructure due to alternating periods of drought and humidity. This dynamic poses significant exposure for individuals, businesses, and their insurers.
An Event Focused on Decision-Makers’ Operational Challenges
The December 9 seminar gave the floor to researchers and experts who presented their work around three key areas for executives and senior managers:
- Prevention and operational management of growing climate risks
- Parametric insurance: what opportunities exist to speed up compensation and strengthen resilience?
- Empirical and spatial risk measurement: how can model accuracy and pricing decisions be improved?
A roundtable discussion brought together Édouard Vieillefond (CCR – Caisse Centrale de Réassurance), Christophe Izart (Banque Populaire Auvergne Rhône-Alpes), and Francis Thomine (Groupama Rhône-Alpes Auvergne) to discuss the insurability of these risks—particularly clay shrink–swell, a risk especially prevalent in the Auvergne-Rhône-Alpes region. They shared their commitments and adaptation strategies in response to rising climate risk.
The cocktail reception following the roundtable extended discussions with these experts.
We are proud to partner with emlyon business school through this chair, which reflects our commitment to addressing major climate challenges. The research findings will enable us, as an insurer focused on prevention, to better anticipate, measure, and design solutions to these increasingly severe risks, so that our policyholder-members can build their lives with confidence.
The emlyon chair and the roundtable provide a space for dialogue between academic and professional stakeholders, which is essential for sharing challenges, best practices, and innovations in climate risk management. These exchanges should help the banking and insurance sectors support their clients’ adaptation to the challenges of climate change more effectively.
Scientific Advances to Guide Insurance Strategies
As part of this research, professors Olivier Le Courtois and Lorenz Schneider, along with their PhD candidate Aleksandr Pak, recently published an article titled “Reflections on Clay Shrink–Swell,” available on the SSRN research repository.
Their analysis highlights:
- the difficulty of establishing a single price for this risk, given the wide variability in climatic and geological parameters;
- the limitations of an approach based solely on historical claims data;
- the need to integrate multiple models and forward-looking climate scenarios to reduce uncertainty and adjust pricing strategies.
This approach provides insurers with benchmarks to manage their exposure while preserving the financial sustainability of insurance contracts.
Led by emlyon business school and Groupama Rhône-Alpes Auvergne, the chair has a clear objective: to improve understanding of climate risk in order to support insurance practices. Upcoming research and publications will further deepen this work and provide additional insights for industry professionals.
