A new research center aims to ensure that we learn from past catastrophes

How do we emerge stronger as a society from natural disasters, pandemics, and other critical events that disrupt our normal routines and force us to react under pressure?

That is the focal point of a new research center at the University of Southern Denmark, named the European Center for Risk & Resilience Studies.

The center has been developed in collaboration with the industry and is supported by the global insurance broker and risk advisor, WTW (Willis Towers Watson). The goal is to examine how we can become more resilient, meaning how societies, organizations, or individuals not only become more resistant to current critical events but also acquire learning that ensures they are better prepared for future events.

 - There is already attention around the understanding and calculation of risk, such as the analysis of climate change and its global effects on future risk scenarios. Our focus is different.

- Based on economic theory, we explore how we can improve our ability to withstand upcoming threats by drawing on insights from past events," says Simon Sølvsten, who is the director of the center.

Rethinking risk management and financing

Among the center's initial projects is "Transitions from Catastrophe." The project has been developed in collaboration with WTW and the World Bank and focuses on two primary objectives: Understanding how increased resilience can be built through cooperation between public authorities and private companies and how risk financing can be reimagined through alternative insurance products.

- When the scale of a catastrophe reaches a sufficient level, the state often must step in and provide financial compensation to ensure society's survival. We saw this, for example, during the COVID-19 pandemic.

- In the project, we investigate the historical interaction between public authorities and the industry to determine when it is appropriate for public intervention and when it is more appropriate to let the forces of the free market handle the challenges on their own, says Simon Sølvsten.

He explains that the project also aims to understand how the insurance market can adapt its products to address catastrophic situations in a beneficial way:

- That is, so the products support the needs of those affected to quickly access financial resources that can limit the extent of the catastrophe while being economically advantageous for both the policyholder and the insurance company.

Collaboration with the industry

The European Center for Risk & Resilience Studies is intended to be a hub for research collaborations where projects are developed in cooperation with decision-makers, business actors, and researchers. The vision is to create a more resilient future by bringing together various stakeholders to jointly acquire knowledge that ensures necessary and timely actions.

According to Simon Sølvsten, this approach has already proven to add value to some complex challenges, but he points out that collaboration is not without a range of considerations:

- A concern that often arises in connection with research centers that collaborate with politicians and the business world is the risk of compromising their research integrity. In the center, we have, therefore, incorporated a structure to ensure a balance between collaboration and research independence, ensuring transparency and objectivity. Our research integrity is and will remain the cornerstone of the center's credibility.