Events in Physics
Daria Mervis (Moody’s RMS, London) "Modeling the Unthinkable: Careers at the Intersection of Physics and Insurance"
Abstract: In today’s increasingly complex and interconnected world, the insurance industry plays a vital role in the global economy. In 2024, insured losses from natural disasters reached approximately $140 billion—one of the costliest years since 1980. Hurricane Milton alone accounted for $25 billion in losses, the LA wildfires are projected at $40 billion, and floods in Spain at $4.2 billion.
To manage and mitigate these risks, insurers rely on advanced probabilistic models to assess losses from natural disasters, cyberattacks, and other emerging threats. As risks grow more unpredictable, effective risk selection, pricing, and management demand deeper insights.
How are these models created? There are four components: exposure, hazard, vulnerability and financial model. Exposure is the location, risk profile and characteristics of the insured entity, e.g. a residential home in Florida. Hazard is the type of disaster we are looking to model, e.g. hurricane, earthquake etc and the relevant characteristics such as wind speed, distance to max wind etc. Vulnerability is the damage profile of the insured entity, generating a damage ratio. Lastly the financial model overlays the insured tranches for the entity and calculates the financial loss. The output of these models is used across the insurance and reinsurance industries to understand their risk profile and guide decision making.
The Moody’s RMS suite of high-definition models delivers a more accurate representation of potential losses, transforming risk management and decision-making. By combining cutting-edge science, data, technology, and expertise, we empower insurers, reinsurers, and brokers to tackle their most complex challenges—helping close the insurance gap and drive performance.
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Daria graduated with a Master degree in Physics from Imperial College London in 2009, at the height of the global financial crisis. Embracing the atmosphere of panic, she pursued a career centred on risk and catastrophe in the insurance industry, specialising in natural disaster modelling. Over the years, she has applied her expertise across diverse sectors, from advising investment banks on strategy to shaping a no-nicotine business plan for Philip Morris International. Now, she has come full circle, returning to Moody’s RMS, the world’s leading provider of risk models for the insurance industry.
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