The re/insurance broking giant Aon has announced the launch of a tool that will help clients better visualize and understand their exposure to physical climate risk.
Aon’s new Climate Risk Monitor can assess the current and future exposures of an organization to key chronic risks such as drought, extreme rainfall, extreme heat, freeze, and wildfire. It uses different climate change scenarios and provides diagnostic reports on the impact on individual assets and portfolios as well as geographical visualizations.
“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,” said Liz Henderson, global head of climate risk advisory for Aon.
“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.”
With the tool, risk managers will be able to further understand the climate risk and inform property insurance placements for their organizations through collaborations with brokers from Aon in helping obtain optimal limits as well as renewals pricing.
The climate risk monitor can also help clients in assessing the changing risk profiles as well as managing risk in locations where conditions may be changing. The tool also assists in demonstrating climate understanding and planning to their stakeholders as well as supporting their climate disclosures. It will also aim to provide better information to insurers when it comes to risk selection as well as pricing and reinsurance renewals.
The tool uses standard IPCC (SSP-RCP) emissions scenarios through various time horizons to align with the regulatory requirements. The firm leverages several global climate model outputs that came from global academic and government institutions to produce relevant peril metrics.
What are your thoughts on this story? Please feel free to share your comments below.
