Science collaborations key for ILS innovation: Tangency’s Stanton at Convergence

Welcoming attendees to ILS Bermuda’s 2024 Convergence event today, Jo Stanton, Chair of ILS Bermuda and Head of Finance at insurance-linked securities (ILS) investment manager Tangency Capital explained that with hurricane Milton heading for Florida it highlights the importance of collaborations with science to drive the understanding of risk and innovation.

It is the twelfth year of ILS Bermuda’s longstanding Convergence event, a regular feature for the ILS market at this time of the year.

In 2024, the ILS Bermuda organising committee has embedded scientific insights deeply into the agenda for the day and Stanton explained why and also the fact this looking potential catastrophes, such as hurricane Milton, show exactly why this is important for the ILS market.

Speaking at the opening of today’s Convergence event in Bermuda, Stanton said to the assembled audience, “We are proud to host this event in Bermuda, the global capital for risk transfer.”

Then adding, “I’m sure many of you are scrolling the news sites and watching the radar right now as Milton barrels across the superheated seas of the Gulf of Mexico towards the west coast of Florida, a potentially historic event.”

Stanton went on to explain that the 2024 hurricane season had defied the forecasts, in terms of storm numbers, but that recent events were showing just how impactful the season could still be.

“The season ramped up in late September, and we now have the devastating humanitarian disaster unfolding in the wake of hurricane Helene, as well as the ongoing hurricane Milton,” Stanton explained. “It’s not yet clear whether, in terms of overall numbers, this season will prove to be remarkable, although individual events certainly are.”

Continuing, “What does this tell us about the links between events and predictions? How do we interpret the results of scientific research, and how is our decision making influenced by our behavioural response to the conclusions of the research? What are all the other factors that influence the severity of an event, such as inflation, building codes, population growth? Will there be more catastrophes over the years as a consequence of climate change?

“These are some of the questions that will be discussed at this year’s event as we spotlight the cutting edge climate science available to us from our esteemed academic peers.”

Stanton went on to say, “We will look at how we bring their expertise and forecasting into our risk models so that we can innovate more effective ways to manage and transfer risk, with ILS playing a key part in that innovation.

“Understanding the evolving nature of hazards is essential for developing products that provide protection where it is needed and ensure that capital is deployed effectively.

“The collaboration between science and business is essential to building resilience in the face of a changing climate.

“These collaborations underscore Bermuda’s leadership in blending innovation science and finance to tackle global risks.”