Aon : Climate Risk Monitor to Drive Better Decisions On Risk Management and Renewals
AON
LONDON, March 21, 2024 - Aon plc (NYSE: AON), a leading global professional services firm, today announced the launch of its Climate Risk Monitor, an innovative tool that helps clients visualize and understand their exposures to physical climate risk in order to enable better business decisions.
The property insurance market is increasingly influenced by climate-related perils, with $112 billion of insured losses caused by weather-related catastrophes in 2023. Aon's Climate Risk Monitor assesses an organization's current and future exposures to key chronic risks - drought, extreme rainfall, extreme heat, freeze and wildfire - under different climate change scenarios, providing diagnostic reports on individual asset and portfolio impact, as well as geographical visualizations.
Risk managers can use this data to better understand climate risk and in turn inform property insurance placements for their organizations, collaborating with Aon's brokers to help obtain optimal limits and renewals pricing. As part of Aon's Risk Capital capability, the firm brings expertise, relationships, and analytics to unlock capital, which is accessed across markets, geographies, or instruments.
Climate Risk Monitor allows clients to assess evolving risk profiles and manage risk in locations with projected changes - thereby informing risk transfer strategies - while assisting them to demonstrate climate understanding and planning to stakeholders, and supporting their climate disclosures.
The tool can also help to better inform insurers' risk selection, and strategies around pricing and reinsurance renewals.
Climate Risk Monitor expands on Aon's existing solutions that help clients assess and manage natural catastrophe risk, including the firm's Impact Forecasting suite of global catastrophe models; experts in enterprise risk management, engineering, casualty and transition risk; and 14 global academic collaborations.
Liz Henderson, global head of Climate Risk Advisory for Aon, said: "In developing Climate Risk Monitor, we utilized our wide-ranging scientific and business expertise to transform a wealth of well-validated climate data into useful information for clients. The importance of this output extends beyond physical risk management - having a better understanding of climate exposures can also assist with human capital decisions around health and talent."
Aon's new Climate Hub in Singapore develop Climate Risk Monitor in collaboration with the firm's global reinsurance analytics experts. Supported by the Singapore Economic Development Board, the Hub helps Aon's global clients to navigate environmental risk and opportunities.
The tool uses standard IPCC (SSP-RCP) emissions scenarios over multiple time horizons to align with regulatory requirements. To produce relevant peril metrics, Aon leverages a range of global climate model outputs from different global academic and government institutions, as part of the Coupled Model Intercomparison Project Phase 6, whose results are used in IPCC assessment reports.
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Aon plc (NYSE: AON) exists to shape decisions for the better - to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
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AON plc published this content on 21 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2024 16:31:31 UTC.