The effects of climate change are being increasingly felt by millions. Major catastrophes, such as wildfires, floods and extreme storms are causing distress across the world.
We are at a critical juncture in the battle to mitigate the worst effects of a changing environment and push towards net zero. Key to that ongoing work, and informing all of the discussions about future policy decisions at this month’s Cop 28 summit in Dubai, is the strong research base on the current state of our planet, and modelling around what the future may bring – work that is largely carried out by brilliant academics in various universities across the world.
These institutions look into a plethora of climate-related issues. A particularly interesting emerging area of research is around climate risk and its inclusion in the modelling of natural catastrophes. Further understanding of this particular area is key for all stakeholders that are responsible for mitigating climate disasters – including governments and regulators, lenders, insurers and, of course, the building owners who are affected by adverse events.
Further development and understanding of climate catastrophe and risks is something to which Aon is committed. We have launched a number of academic partnerships with researchers in some of the most respected universities across the world, to support their efforts in furthering their understanding of climate and catastrophe risk. To date, Aon has been involved in 14 of such global academic partnerships, and we are keen to expand into new areas; this work is vitally important to constantly updating our knowledge of the climate situation in the here and now, as well as modelling for the future, and will greatly benefit the push towards mitigating catastrophe exposures.
As an example, this June, researchers at Columbia University found that under certain scenarios, losses resulting from hurricanes in the US would increase by at least 10 per cent over the next 20 years as a result of changes in climatic activity (based on evolving climate research, and subject to potential revision as new insights are obtained). Colombia also explored different ways to quantify moisture in the air, and how its impact on the frequency of hurricanes could change in the future.
Elsewhere, our collaboration with the University of California examines how anticipated climatic changes will affect areas impacted by wildfires, while researchers at the Karlsruhe Institute of Technology in Germany have helped us to expand our understanding of extreme hydrological events in Europe. Our other collaborations include work with researchers at Cambridge and Havard universities.
With our wide range of academic collaborations, our goal is to fund the research that’s essential to helping people understand climate change, with a view to helping shape better decisions around climate risk mitigation.
The findings uncovered by Aon’s academic partners primarily help a range of public and private sector stakeholders. Without such research, governments and regulators risk legislating to tackle the crisis at a disadvantage; lenders may not have the confidence to invest in crucial infrastructure projects in an ever-changing environment; and insurers could lack the comprehensive knowledge base used to develop products to protect the public and private sector from the effects of catastrophes. Such research is able to help all businesses and building owners better plan and understand their surroundings.
A lot is at stake: this output from the world’s best universities will go some way in informing current policymaking, product development, and ultimately, people’s lives. While steps are increasingly being taken to manage the transition, both governments and industry need to fully understand the current risks, and adopt extensive climate mitigation strategies – otherwise there will likely be serious negative impacts on people and property. Not only are these academic collaborations progressing climate science, they are enhancing catastrophe model development and even helping organisations fulfil their Environmental, Social and Governance (ESG) mandates.
Aon has provided consulting services to insurers for several decades. And managing catastrophe risk continues to be an increasing, and important, part of that work. There’s huge demand for more analytics, data and advice on how to make better decisions; and a key part of that work is how to navigate volatility, build resilience, and plan and strategise around climate disasters and catastrophes.
Supporting the research of academic institutions through our academic partnerships helps to bolster the existing research base, so that we can develop more robust climate risk resilience. It’s a part of the overall challenge to tackle climate change and push towards net zero – something we all can, and need, to get behind.