Aon has introduced its Climate Risk Monitor tool, designed to assist clients in visualising and comprehending their exposure to physical climate risks.
The tool aims to facilitate more informed business decisions and was developed by Aon’s Climate Hub in Singapore, in association with global reinsurance analytics experts.
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According to Aon, the property insurance market has seen significant impact from climate-related perils, with weather-related catastrophes causing insured losses of $112bn in 2023.
The Climate Risk Monitor evaluates an organisation’s current and future risks associated with chronic climate issues such as drought, extreme rainfall and wildfire.
It provides diagnostic reports on the impact on individual assets and portfolios, along with geographical visualisations.
This data is crucial for risk managers to better understand climate risk, which can influence property insurance placements and negotiations with Aon’s brokers to secure optimal coverage and pricing.
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By GlobalDataAon’s Risk Capital capability, which includes expertise, relationships and analytics, plays a key role in unlocking capital that can be accessed across various markets and instruments.
The Climate Risk Monitor tool is an extension of this capability, enabling clients to assess changing risk profiles and manage risk in areas with projected climate changes.
Furthermore, the tool is beneficial for insurers, aiding risk selection and informing strategies for pricing and reinsurance renewals.
It expands Aon’s suite of solutions for natural catastrophe risk assessment and management, which includes global catastrophe models, enterprise risk management and collaborations with 14 global academic institutions.
The tool utilises standard Intergovernmental Panel on Climate Change emissions scenarios over multiple time horizons to comply with regulatory requirements and leverages global climate model outputs from the Coupled Model Intercomparison Project Phase VI.
Aon global head of climate risk advisory Liz Henderson said: “In developing Climate Risk Monitor, we utilised 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.”
Last week, Aon launched Partner Risk Insights, a digital tool aimed at simplifying third-party risk management for its US clients.
