The UK insurance industry is a worldwide operation, earning around five billion pounds sterling last year. With 92 billion pounds sterling of premium income (some 14 per cent of gross domestic product - GDP) it is an important contributor to the country's economy.

The aim of the Tsunami initiative is to gain knowledge from the UK's strong science base that can be exploited to further improve the industry's risk assessment capabilities and sharpen its competitiveness in world markets. Tsunami stands for: Technology and Science in Universities, NERC (Natural Environment Research Council) and the MetOffice for Insurance.

A consortium of eight companies including underwriters and brokers has been formed to stimulate new research proposals specifically to meet the needs of insurers. Under the scheme, the Government's Department of Trade and Industry (DTI) will provide "pump-priming" funds amounting to 480,000 pounds sterling over the next three years that will be matched by contributions from consortium members.

They are already considering 55 research project proposals from scientists in a many UK institutions, ranging from studies of storm-surge probability around the UK coastline to the correlation of earthquake risks in various parts of the world with space "weather" events such as solar storms.

John Battle, the Minister for Science, Energy and Technology, described the Tsunami (also, appropriately, the Japanese word for tidal wave) initiative as a good example of how an industry could "build new bridges with the science community and make the vital connections between blue sky research and business success in the next century".

Tsunami will help change the way in which the insurance industry taps into the wealth of research expertise in the UK. The initiative has been led by Dr Dougal Goodman, Acting Director of the British Antarctic Survey (BAS).

Dr Goodman said: "Both insurance and reinsurance are international businesses in which successful players are using increasingly sophisticated techniques and spending more on scientific research."

He pointed out that BAS's parent body, NERC, already spends 165 million pounds sterling a year on environmental research, of which about 12 million pounds sterling is devoted to studies of various environmental risks and hazards.

"The new scheme would help the insurance industry to communicate its own specific needs to scientists and would also identify research already done that could answer some of the industry's risk management questions."

Floods, cyclones, subsidence, erosion, radiation damage to satellites and timely prediction of extreme climatic events are areas likely to be of interest to insurers and reinsurers. Further research proposals from the country's leading research laboratories, universities and research councils are being invited.

Nick Golden, Group Underwriting and Reinsurance Manager of consortium member Royal and Sun Alliance Group, said that insurance essentially involves "the intelligent application of knowledge". The new project was designed to increase this knowledge, to illuminate the changing pattern of insurance risks around the globe and to alert insurers to the implications of these.

Changes in weather patterns were, he pointed out, of special importance to the industry in view of the wide-scale damage that could result from climatic disasters, as well as long-term effects such as changes in the level of water tables. It was important to recognise the inter-relationship - "teleconnections" - between weather changes in one part of the globe and those in another, such as the "El Nino" effect - an extensive prolonged warming of the eastern tropical Pacific occurring every few years, with major meteorological results.

The Tsunami consortium members are: Benfield Ellinger Ltd, Catlin Underwriting Agencies Ltd, Commercial Union Assurance Company plc, D P Mann Underwriting Agency Ltd, Royal & Sun Alliance Insurance Group plc, Sedgwick Reinsurance Brokers Ltd, Greig Fester Group Ltd, and Wren Syndicates Management Ltd. The British Antarctic Survey will represent the DTI in the consortium.