The impact of uncertain precipitation data on insurance loss estimates using a flood catastrophe model

Catastrophe risk models used by the insurance industry are likely subject to significant uncertainty, but due to their proprietary nature and strict licensing conditions they are not available for experimentation. In addition, even if such experiments were conducted, these would not be repeatable by other researchers because commercial confidentiality issues prevent the details of proprietary catastrophe model structures from being described in public domain documents. However, such experimentation is urgently required to improve decision making in both insurance and reinsurance markets. In this paper we therefore construct our own catastrophe risk model for flooding in Dublin, Ireland, in order to assess the impact of typical precipitation data uncertainty on loss predictions. As we consider only a city region rather than a whole territory and have access to detailed data and computing resources typically unavailable to industry modellers, our model is significantly more detailed than most commercial products. The model consists of four components, a stochastic rainfall module, a hydrological and hydraulic flood hazard module, a vulnerability module, and a financial loss module. Using these we undertake a series of simulations to test the impact of driving the stochastic event generator with four different rainfall data sets: ground gauge data, gauge-corrected rainfall radar, meteorological reanalysis data (European Centre for Medium-Range Weather Forecasts Reanalysis-Interim; ERA-Interim) and a satellite rainfall product (The Climate Prediction Center morphing method; CMORPH). Catastrophe models are unusual because they use the upper three components of the modelling chain to generate a large synthetic database of unobserved and severe loss-driving events for which estimated losses are calculated. We find the loss estimates to be more sensitive to uncertainties propagated from the driving precipitation data sets than to other uncertainties in the hazard and vulnerability modules, suggesting that the range of uncertainty within catastrophe model structures may be greater than commonly believed.

Effects of orange juice formulation on prebiotic functionality using an in vitro colonic model sytem

A three-stage continuous fermentative colonic model system was used to monitor in vitro the effect of different orange juice formulations on prebiotic activity. Three different juices with and without Bimuno, a GOS mixture containing galactooligosaccharides (B-GOS) were assessed in terms of their ability to induce a bifidogenic microbiota. The recipe development was based on incorporating 2.75g B-GOS into a 250 ml serving of juice (65°Brix of concentrate juice). Alongside the production of B-GOS juice, a control juice - orange juice without any additional Bimuno and a positive control juice, containing all the components of Bimuno (glucose, galactose and lactose) in the same relative proportions with the exception of B-GOS were developed. Ion Exchange Chromotography analysis was used to test the maintenance of bimuno components after the production process. Data showed that sterilisation had no significant effect on concentration of B-GOS and simple sugars. The three juice formulations were digested under conditions resembling the gastric and small intestinal environments. Main bacterial groups of the faecal microbiota were evaluated throughout the colonic model study using 16S rRNA-based fluorescence in situ hybridization (FISH). Potential effects of supplementation of the juices on microbial metabolism were studied measuring short chain fatty acids (SCFAs) using gas chromatography. Furthermore, B-GOS juices showed positive modulations of the microbiota composition and metabolic activity. In particular, numbers of faecal bifidobacteria and lactobacilli were significantly higher when B-GOS juice was fermented compared to controls. Furthermore, fermentation of B-GOS juice resulted in an increase in Roseburia subcluster and concomitantly increased butyrate production, which is of potential benefit to the host. In conclusion, this study has shown B-GOS within orange juice can have a beneficial effect on the fecal microbiota.

Factors affecting the concentration in seven-spotted ladybirds (Coccinella septempunctata L.) of Cd and Zn transferred through the food chain

The transfer of Cd and Zn from soils amended with sewage sludge was followed through a food chain consisting of wheat, aphids and the predator Coccinella septempunctata. Multiple regression models were generated to predict the concentrations of Cd and Zn in C. septempunctata. No significant model could be generated for Cd, indicting that the concentration of this metal was maintained within relatively narrow limits. A model predicting 64% of the variability in the Zn concentration of C. septempunctata was generated from of the concentration of Zn in the diet, time and rate of Zn consumption. The results suggest that decreasing the rate of food consumption is an effective mechanism to prevent the accumulation of Zn and that the availability of Zn in the aphid prey increased with the concentration in the aphids. The results emphasise the importance of using ecologically relevant food chains and exposure pathways during ecotoxicological studies.

Large deviations of Rouse polymer chain: first passage problem

The purpose of this paper is to investigate several analytical methods of solving first passage (FP) problem for the Rouse model, a simplest model of a polymer chain. We show that this problem has to be treated as a multi-dimensional Kramers' problem, which presents rich and unexpected behavior. We first perform direct and forward-flux sampling (FFS) simulations, and measure the mean first-passage time $\tau(z)$ for the free end to reach a certain distance $z$ away from the origin. The results show that the mean FP time is getting faster if the Rouse chain is represented by more beads. Two scaling regimes of $\tau(z)$ are observed, with transition between them varying as a function of chain length. We use these simulations results to test two theoretical approaches. One is a well known asymptotic theory valid in the limit of zero temperature. We show that this limit corresponds to fully extended chain when each chain segment is stretched, which is not particularly realistic. A new theory based on the well known Freidlin-Wentzell theory is proposed, where dynamics is projected onto the minimal action path. The new theory predicts both scaling regimes correctly, but fails to get the correct numerical prefactor in the first regime. Combining our theory with the FFS simulations lead us to a simple analytical expression valid for all extensions and chain lengths. One of the applications of polymer FP problem occurs in the context of branched polymer rheology. In this paper, we consider the arm-retraction mechanism in the tube model, which maps exactly on the model we have solved. The results are compared to the Milner-McLeish theory without constraint release, which is found to overestimate FP time by a factor of 10 or more.

Bayesian model comparison with un-normalised likelihoods

Models for which the likelihood function can be evaluated only up to a parameter-dependent unknown normalizing constant, such as Markov random field models, are used widely in computer science, statistical physics, spatial statistics, and network analysis. However, Bayesian analysis of these models using standard Monte Carlo methods is not possible due to the intractability of their likelihood functions. Several methods that permit exact, or close to exact, simulation from the posterior distribution have recently been developed. However, estimating the evidence and Bayes’ factors for these models remains challenging in general. This paper describes new random weight importance sampling and sequential Monte Carlo methods for estimating BFs that use simulation to circumvent the evaluation of the intractable likelihood, and compares them to existing methods. In some cases we observe an advantage in the use of biased weight estimates. An initial investigation into the theoretical and empirical properties of this class of methods is presented. Some support for the use of biased estimates is presented, but we advocate caution in the use of such estimates.

Second-life retailing: a reverse supply chain perspective

Purpose – The authors examine the role of entrepreneurial business models in the reverse supply chain of apparel/fashion retailers. The purpose of this paper is to offer an alternative approach to the “return to the point of origin” prevalent in the reverse chain of manufacturers but less technically and economically feasible in the case of apparel/fashion retailers. This approach, second-life retailing, not only reduces waste but also democratises consumption. Design/methodology/approach – The paper is based on an extensive literature review, semi-structured interviews with managers of two second-life retailers in Malaysia and observations of a number of stores. Findings – Using the Business Model Canvas, the authors demonstrate the essential characteristics of second-life retailers. Retailers in this study, unlike retailers in the developed world, combine traditional business models with off-price retailing. There is no clear demarcation between the forward and reverse supply chain used to manage first- and second-hand retailing. Practical implications – The paper demonstrates the potential of innovative business models in the reverse supply chain. It encourages managers to look beyond the “return to the point of origin” and seek imaginative alternatives. Such alternatives potentially could result in additional revenue, enhanced sustainability and democratisation of consumption meeting triple bottom line objectives. Originality/value – This paper highlights the importance and relevance of entrepreneurial business models in addressing the reverse supply chain, demonstrating this with the aid of two Malaysian off-price retailers. It also contributes to our nascent knowledge by focusing on emerging markets.