Re/insurance brokerage giant Aon has unveiled a groundbreaking tool designed to assist clients in visualizing and comprehending their exposure to physical climate risks.
Aon’s newly launched Climate Risk Monitor empowers organizations to evaluate their current and future exposures to significant chronic risks such as droughts, extreme rainfall, heatwaves, freezes, and wildfires. Utilizing diverse climate change scenarios, it delivers diagnostic reports detailing the impact on individual assets and portfolios, complemented by geographical visualizations.
Liz Henderson, Aon’s global head of climate risk advisory, emphasized the significance of this development: “In creating the Climate Risk Monitor, we harnessed our extensive scientific and business acumen to translate a wealth of rigorously validated climate data into actionable insights for our clients.”
The tool’s utility extends beyond physical risk management, as Henderson elaborated: “A deeper understanding of climate exposures can inform critical decisions regarding human capital, encompassing health and talent considerations.”
By leveraging the Climate Risk Monitor, risk managers can enhance their comprehension of climate risk and collaborate with Aon brokers to optimize property insurance placements, ensuring optimal limits and pricing during renewals.
Moreover, the tool aids clients in evaluating evolving risk profiles and proactively managing risks in regions undergoing environmental changes. Its functionality extends to demonstrating climate understanding and planning to stakeholders, facilitating climate disclosures, and providing insurers with enhanced insights for risk selection, pricing, and reinsurance renewals.
To meet regulatory requirements, the tool utilizes standard IPCC (SSP-RCP) emissions scenarios across various time horizons. Aon harnesses outputs from multiple global climate models developed by esteemed academic and government institutions to generate pertinent peril metrics.
