emlyon research chair | Groupama Rhône-Alpes Auvergne

emlyon business school, whose Faculty is conducting research analyses in insurance, finance, probabilities, statistics, risks and uncertainty, and environmental transition, is starting a research chair with Groupama Auvergne Rhône Alpes to elaborate conceptual devices allowing to understand the challenges of insurance in the face of climate change, in which research will focus on clay-related hazards.
Conducted by two senior professors Olivier Le Courtois and Lorenz Schneider, this chair also associates junior professors and a group of international professors. Additionally, the chair allows to fund a student undertaking a doctoral thesis. Scientific events shall promote the chair's specific output. The “Climate Risk and Property Insurance” chair is part of the QUANT research center of emlyon business school. The studies of this research center all focus on mathematic modeling applied to economic sciences and management. Two major questions arise regarding property hazards: 1. Can we model them as such, and if so, how? 2. Can we model them as consequences of climate evolutions?

Both endogenous and exogenous modeling are to be designed in a context of environmental instability. The ability to model risks depends on the ability to manage them, and consequently, on the ability to continue to provide an insurance coverage to individuals, companies and farms. Indeed, providing this service cannot become a net source of costs for insurers, in a context of withdrawal from re-insurers. Additionally, redefining underlying risk structure - their potential instability and their non-linearity - shall obviously go hand-in-hand with redefining contracts. This can be achieved by redefining the risks covered, based on deductible modifications, prevention, etc. In any case, modeling reconstruction and pricing taking into account climate hazards, need to be associated with the reconstruction of the protection offer.

The chair emlyon business school – Groupama RAAU “Climate Risk and Property Insurance” aims at developing a conceptual framework, theoretical and quantitative, describing the impact of climate change on property risk insurance, focusing in priority on clay hazards. The objective is to conduct a research, notably a doctoral one, around the probabilistic modeling of climate risks, to gain a better understanding of how to adapt the mechanisms of property insurance to environmental transition.

In particular:

• Risks generated by extreme weather conditions and changes in seasonal models
• Extreme risks, extreme value theory and joint distribution of extreme events.
• Reliability of climate data
• Stability of climate paradigms

Lastly, one of our main objectives is to widely disseminate our research output on climate risk and property insurance via publications and scientific events.