Insurance broker Aon plc has launched Climate Risk Monitor, a tool to help clients visualize and understand their exposure to physical climate risks to enable better business decisions. did.
The property and casualty insurance market is increasingly affected by climate-related crises, with weather-related catastrophes expected to result in $112 billion in insured losses in 2023.
Aon's Climate Risk Monitor assesses an organization's current and future exposure to key chronic risks (drought, extreme rainfall, extreme heat, freeze, wildfire) under a variety of climate change scenarios and provides diagnostic reports and geographic visualization of the impact on assets and portfolios.
Risk managers can use this data to better understand climate risks and, in turn, inform their organization's property and casualty insurance arrangements, working with Aon brokers to assist in optimal limit and renewal pricing. Aon said.
As part of Aon's Risk Capital capability, the firm provides the expertise, relationships and analysis to unlock accessible capital across markets, geographies and products.
Climate Risk Monitors enable clients to assess evolving risk profiles and manage risk where changes are expected, informing risk transfer strategies while also helping clients improve their climate understanding and planning to stakeholders. Aon continued.
The tool can also help better inform insurers' risk selection and pricing and reinsurance renewal strategies.
Climate Risk Monitor expands on Aon's existing solutions that help customers assess and manage natural disaster risks. This includes the company's impact prediction suite of global catastrophe models. Expert in enterprise risk management, engineering, casualty risk, and transition risk. 14 global academic collaborations.
“In developing the Climate Risk Monitor, we leveraged our extensive scientific and business expertise to draw on a wealth of well-validated climate data,” Liz Henderson, global head of climate risk advisory at Aon, said in a statement. We have converted it into useful information for our customers.” .
“The importance of this outcome goes beyond physical risk management. A deeper understanding of exposure to climate change will also inform human capital decisions regarding health and human resources,” Henderson said. .
Aon's new Climate Hub in Singapore, which opened in May 2023, will support the development of a climate risk monitor in collaboration with the company's global reinsurance analysis experts. Supported by the Singapore Economic Development Board, the Climate Hub will help Aon's customers around the world navigate environmental risks and opportunities.
The Climate Risk Monitor tool uses standard IPCC (SSP-RCP) emissions scenarios over multiple time periods to align with regulatory requirements. To develop the relevant risk indicators, Aon is leveraging the work of a variety of global climate models from various global academic and government institutions as part of the Coupled Model Intercomparison Project Phase 6. The results are used in the IPCC assessment report.
Source: Aon
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