The Luminaries Interview Series: Dickie Whitaker

Have research trends changed within the reinsurance market in recent years?

There’s much more innovation than there used to be in the re/insurance market but it’s often unfocused, reactionary. For example, when a major catastrophe happens, there’s unsurprisingly a push for further innovation in that field to better understand, model and price the risk. While that’s understandable, it’s also very inefficient. Research and development in insurance needs to be more strategic and focused.

One of the blockers to innovation in catastrophe modelling within the industry is a belief that some things are just ‘too hard’ to model. Business interruption is another good example of this. I don’t see any fundamental barrier to why this coverage can’t be better modelled. The key to solving many of these problems is making sure we look at the problems collectively, as an industry. It’s only by getting all parties around the table that we can help answer these questions. This is one of the key tenets behind Oasis and the Lighthill Risk Network — to provide an open framework, transparent and accessible to all. Collaborative approaches for complex systems.

Which areas of research could have the most transformative impact on the reinsurance market?

Strategic risk is the biggest concern faced by any company and industry. It’s the reason so many companies fail or decline. I see little focus around this which should be a key priority on R&D and innovation. We can, however, see some obvious candidates such as emerging risks around cyber and climate change and more focus on technology. Within these are the wealth of interesting questions like the climate change, it impacts every part of the world and every line of business. From the direct impacts of changing windstorms, floods, and droughts on global property cat lines to contingent risks of food security and supply chain risk.

Looking into the future, where do you see the biggest research challenges and how do we overcome them?

Research into systemic risks like global inflation and climate change are definitely up there. Along with the COVID-19 pandemic, we’ve all been blind-sided by the economic and energy crises compounded by the Russia/Ukraine war. It impacts all insurance lines and coverages.

In terms of how we overcome these challenges, research needs to be mostly collaborative and open. By setting up industry initiatives like Oasis, it provides us with an open platform, a common language for everyone to engage with. Dickie Whitaker was interviewed by GRC Research Director, Iain Willis.

The Gallagher Research Centre (GRC) is a dedicated fund for collaboration between academics and the reinsurance industry. It provides access to independent, peer-reviewed academic work to support applied innovations across all Gallagher Re’s advisory and transactional products related to both natural and human-made perils.