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Julius Kob

Julius Kob
Name
Julius Kob
Title
Organisation
Sociology School of Social and Political Science University of Edinburgh
Address
Edinburgh UK EH8 9LD
Telephone
+49 (0) 172 96 33433
E-Mail
Research Interests
Social Studies of Finance, Science and technology studies, Historical sociology, Economic Sociology, ethnography, Reinsurance markets, Insurance Linked Securities (ILS) markets, Catastrophe Modelling, Risk Studies, Financial Markets, Sociology of Knowledge, infrastructure, epistemologies, Uncertainty, Climate change, Experimentation, Non-knowledge, Simulations
URL
http://www.sps.ed.ac.uk/gradschool/community_and_representation/research_student_profiles/sociology/julius_kob

PhD Title

„Model-made Markets“: Reinsurance, Financial Markets and the Sociology of Catastrophe Modelling

PhD Project and Research

Experimentality of Markets: Natural Disaster Risk Markets, Reinsurance and the Sociology of  Catastrophe Modelling

My project revolves around the question of how socio-technical epistemic practices and devices of risk create markets and how markets are then further shaped by socio-technical risk governance of these practices and devices. The market focused on is the financial market for natural disaster risk in which a variety of structured financial products are traded, so-called ‘insurance-linked securities’ or ILSs – a market where natural catastrophes effectively are rendered financial economic products. At the centre of this market is ‘catastrophe modelling’, the epistemic practice of catastrophic risk assessment in which myriads of potential natural catastrophic events are artificially modelled and translated into common financial risk measures. This practice emerged as a confluence of risk assessment methods from earth science (seismology, earthquake engineering, meteorology, etc.) and the insurance industry starting in the mid-20th century. It is applied to manage insurance companies’ financial uncertainties of large-scale natural catastrophes in disaster insurance policy pricing. Chiefly, however, it is applied by reinsurance firms, the insurers of insurers, who guarantee the solvency of, and thus the ability of claims payments by, insurance companies in case of huge financial losses due to occurring natural catastrophes.

The central problem of managing these risks is an epistemic one: the unknowability of when, where, and how severely a natural catastrophe, such as an earthquake or a hurricane, will unfold. As natural catastrophes are highly individual and infrequent, an artificial history of ‘imagined’ catastrophic events is being simulated and used for projecting possible financial losses. The outputs of these modelling practices are rendered in common financial portfolio risk quantification. By making natural catastrophes ‘connectible’ to common financial market practices, financial engineers based on it risky insurance-linked securities like ‘catastrophe bonds’ starting in the early 1990’s. They allow capital markets investors, instead of reinsurance companies, to provide the capital for potential pay-outs while profiting on high interest rates. The risk of natural catastrophes has since been increasingly loaded onto the general financial markets system – today about 20% of catastrophe reinsurance is placed here, instead of the ‘shielded’ space of reinsurance companies’ traditional risk management practices. How this shift, generally referred to as the ‘convergence of insurance and capital markets’, will alter global catastrophic risk management and what consequences it might have for systemic global financial stability is in itself highly uncertain.

This ethnography- and interview-based project tries to answer the question of how exactly the ILSs market was enabled by this epistemic practice of catastrophe modelling. More importantly though, this project frames catastrophe modelling as an ‘experimental’ practice, which does not necessarily produce viable truths, but creates an epistemic space, a form of Baudrillardian ‘hyper-reality’, in which ILSs legitimately can exist. This form of experimentality is based on the relational, decentralised, and distributed practice of catastrophe modelling and the socio-technical struggles in rendering it legitimate. Thus, the major unit of analysis will be that of ‘communities of practice’ of catastrophe modelling throughout reinsurers, catastrophe modelling firms, regulators, ILSs financial firms, and rating agencies. The core question will be, whether this inherent and constant experimentality destabilises the epistemic state of the market, on which it ultimately hinges. Or whether it opens up an ‘ordered’ space of permanently adjusting negotiations about the financial ‘ontology’ of natural catastrophes as a new form of risk management and socio-technical governance of epistemic risk models in an extremely uncertain market.

Supervision

Prof Donald MacKenzie

Dr Iain Hardie

Qualifications

PhD Sociology, University of Edinburgh,  UK (ongoing since 2016)

MSc Economy, Risk and Society (Economic Sociology), London School of Economics and Political Science,  UK (2014)

BA Sociology (minor Psychology), Universität Hamburg, Germany (2012)

Publications & Conferences

"Catastrophe Modelling in Reinsurance and its Future in the Capital Markets". Julius Kob. April 2017. "New Directions Conference" at the School of Social and Political Science, University of Edinburgh, UK.

“Chains of Value: How Intermediaries Evaluate Financial Instruments” Conference at SSPS, University of Edinburgh. Co-organiser. May 2017.

“Making a Market for Acts of God: The Practice of Risk Trading in the Global Reinsurance Industry (Book Review)”. Julius Kob. In Organization, (in print) 2017.

“Getting the Trembling Mountain to the Market: A History of Catastrophe Modelling and the Emergence of a New Disaster Risk Market”. Julius Kob. March 2015. “Financialisation of Nature” Conference at STEPS Centre & CGPE, University of Sussex, UK.

Teaching Experience

Sociology 1a: The Sociological Imagination: Individuals and Society (SCIL08004), tutorial, essay assessment and marking; 1st year UG main lecture, winter semester 2017; University of Edinburgh

Organisational and Personnel Psychology, co-lecturing and coursework assessments; 3rd year UG seminar; summer semester 2013; University of Applied Administrative Science Hannover

Research Methods, co-lecturing and coursework assessments; 3rd year UG seminar; summer semester 2013; University of Applied Administrative Science Hannover

Statistics, co-lecturing and coursework assessments; 3rd year UG seminar; summer semester 2013; University of Applied Administrative Science Hannover

Social Theory II, tutorial, essays assessment, and marking written examinations; 2nd year UG main lecture; winter semester 2010; University of Hamburg

Social Theory I, tutorial, essays assessment, and marking written examinations; 1st year UG main lecture; winter semester 2009; University of Hamburg

Awards

Economic and Social Research Council (ESRC) Doctoral Studentship Award (2017-2019)

The University of Edinburgh Graduate School of Social and Political Science Special Award 2017 (2017-2019)

Professional Involvement

Head of Product Development (qualitative methods tools for recruiting and performance management); Referenzcheck GmbH, Hamburg (ongoing since 2016)

Management Consultant (corporate ethnographies; developing IT-based performance management systems; executive HR and organisational strategy projects); Lufthansa Technik AG, Hamburg (2014 – 2016)

HR and Management Consulting; Kienbaum GmbH, Hamburg (2010 – 2012)