John Hillier, Tom Perkins, Ryan Li, Hannah Bloomfield, Josie Lau, Stefan Claus, Paul Harrington, Shane Latchman and David Humphry

In 2022 a sequence of storms (Dudley, Eunice and Franklin) inflicted a variety of hazards on the UK and across Northwest Europe, resulting in £2.5–4.2 billion in insured losses. They dramatically illustrate the potential risk of a ‘perfect storm’ involving correlated hazards that co-occur and combine to exacerbate the total impact. Recent scientific research reinforces the evidence that extreme winds and inland flooding systematically co-occur. By better modelling how this relationship might raise insurers’ capital risk we can more firmly argue that insurers’ model assumptions should account for key dependencies between perils. This will ensure that insurers continue to accurately assess and manage risks in line with their risk appetite, and that capital for solvency purposes remains appropriate.