Climate change leads to more frequent and costly natural disasters worldwide. In light of this, insurance can play a pivotal role in supporting recovery and incentivizing investments in hazard mitigation. In this talk, I will present our work on an Adaptive Robust Optimization (ARO) framework for catastrophe insurance premium pricing, applied to flood insurance using data from the US National Flood Insurance Program (NFIP). To the best of our knowledge, this is the first work to use an ARO approach to set disaster insurance premiums. These premiums are designed to protect against both historical flooding risks and forward-looking forecasted risks obtained through machine learning models, thus incorporating the elevated risks posed by climate change. Our research demonstrates that a data-driven optimization approach can lead to a more efficient and fair insurance scheme. This talk is intended to extend an open invitation on how we can incorporate new technologies to improve our financial instruments and aid in climate adaptation.

Cynthia Zeng is an Assistant Professor at the NYU Stern School of Business in Abu Dhabi, where her research focuses on addressing the challenges of climate adaptation and promoting sustainable development through technological innovation. Her work primarily involves developing artificial intelligence solutions to forecast and manage extreme weather events. Cynthia completed her PhD in Operations Research from the Massachusetts Institute of Technology, with her dissertation titled “Multimodal Machine Learning for Climate Adaptation.” She holds a Bachelor’s degree in Mathematics from Imperial College London. In addition to her academic pursuits, she gained valuable industry experience as a quantitative analyst at BlackRock in San Francisco and London, and at the SoftBank Vision Fund in Shanghai.

Cynthia has published in several leading academic journals, including AMS Weather and Forecasting, Nature Digital Medicine, and Healthcare Management Science. Her collaborative work with OCP Group, the world’s largest phosphate producer, has been successfully implemented to achieve a 50% reduction in air pollution from industrial activities in Morocco. She has received numerous awards, including the William Pierskalla Paper Award, the MIT Future of Computing Prize, and the INFORMS Doing Good with Good OR Prize.