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Science of Risk

What is Science of Risk?

Science of Risk is a competition run by Lloyd’s, awarding prized to academics and PhD students who have furthered the understanding of risk and insurance. The competition’s central aim is to apply scientific research to a commercial setting to enable the industry to develop innovative solutions to contemporary global challenges.

In 2021 the Science of Risk Prize focused on the critical challenges posed by systemic risk, and in particular: cyber, pandemics and climate change.

Receiving the overall 2021 Lloyd’s Science of Risk prize is a big honour. It shows there is real appreciation of the growing threat of cyber-crime, and the importance of addressing the challenges it could pose for the globally important maritime sector. My paper looks at ways the physical and cyber worlds affect each other, and how shifting our concept of risk to be more dynamic can be a useful tool moving forwards in a more connected world.
Dr. Kimberly Tam, University of Plymouth

Who won and why?

Lloyd’s received numerous applications across the three categories. The judging panel included Dr. Trevor Maynard, Lloyd’s; Alison Robinson, NERC; Iveren Yongo, Travelers; George Beattie, Beazley; Julia Graham, Airmic; Ben Oppenheim, Metabiota. Entries were judged on their relevance to the insurance industry, the financial significance of the risk and the quality and novelty of the paper.

The overall winner of the competition, and the cyber category winner, was Dr Kimberly Tam from the University of Plymouth. Titled ‘MaCRA: a model-based framework for maritime cyber-risk assessment’, the paper proposes a dynamic risk assessment model that uniquely takes into account both information technology and operational technology, both of which are prevalent in sectors like transportation and critical national infrastructure.

This paper was written to address potential weak links and limitations of other risk assessment methods when applied to the maritime sector. In order to create a software tool that can be used to assess real-world assets, MaCRA has applied for, and received, funding to turn the published framework into a usable product for maritime insurance and cybersecurity efforts to prioritise and mitigate risks.

The judges chose the winning entry as they collectively felt that the applicability and ease of uptake on the suggested framework for the insurance market was the strongest out of all the themes. They also highlighted the major contribution of the paper in the cyber arena as the research not only aids insurers, but also helps ship owners and operators prioritise, aggregate, and understand the evolving risk landscape.

The winners and runners-up of the other categories demonstrated the usefulness of their work to the insurance world. The winner of the pandemic category, Tim Rogers, wrote about how risk solutions need to be adapted due to the predicted increased speed of epidemics spreading through networks, while the winner of the climate change category, David Stainforth, focused on how the insurance industry needs to adapt because of increasing temperature variability that is occurring as a result of climate change.