The insurance industry should analyse near misses and learn from them, as it does from actual events, according to a new report from Lloyd’s and catastrophe modeller RMS.

The report – called Counterfactual Disaster Risk Analysis: Reimagining History – encourages the industry to consider the impacts if global events had panned out differently.

What if the wind had blown radioactive contamination onshore when the Fukushima nuclear plant was struck by a tsunami in 2011? Or what if West Africa had been embroiled in civil war during the 2014 Ebola crisis?

The report discusses how “downward counterfactual analysis” – considering how near misses might have become major disasters – can be conducted and the benefits it brings.

Lloyd’s Head of Innovation Trevor Maynard says such analysis helps facilitate deeper understanding and more coherent communication of future risks.

“After a disaster, risk analysts tend to carefully study what happened, but comparatively little attention is paid to what might have happened,” he said.

“This is a demanding technical undertaking, but we think insurers will benefit from a systematic assessment of downward counterfactuals.”

See ANALYSIS.