Aon  |  Financial Institutions Practice
Forecast Stormy: Climate Change and Local Law ’97 Webinar

Release Date: October 2021

Pete Maloney – Property & Casualty Leader, US Financial Institutions – recently joined industry experts on a webinar held by the New York City Chapter of the Appraisal Institute to discuss how climate is driving change for financial institutions investing in real estate. Financial institutions are responding to investors’ and other stakeholders’ increasing focus on climate change; however, changes in legislation such as the topic of the webinar, New York Local Law 97, are also accelerating change.

As part of a panel, Pete discusses how the planet has a steadily changing risk profile, driven by climate change. The core challenge for brokers is to build an accurate risk profile for firms amid this changing environment. Increasingly, secondary perils such as thunderstorms and floods are worsening in frequency and severity. The incremental losses driven by secondary perils seen over the last 15 years, and their related physical exacerbators, are now being used as part of risk modeling to more accurately present risk and opportunity to the insurance market.

Catastrophe modelling – which originated in the reinsurance market – has now shifted into the commercial markets. By harnessing data gathered from hundreds of thousands of weather and climate events, these insights can now be fed with other factors into Aon’s Risk Finance Decision Platform to help property owners and business leaders make informed decisions about structuring their insurance program across products, retentions, limits and placements.

As climate change continues to impact the physical, economic and commercial environments in new ways, the need to evolve catastrophe modelling, is critical. In this panel, Pete shared insights on the development of catastrophe and climate modeling over the past 30 years, including how innovative climate-adjusted catastrophe models are migrating from insurance into banking and asset management to help meet investor and regulatory requirements.

Find out more about Aon’s development with Columbia and Bristol Universities of climate-adjusted catastrophe models in a recent paper Building a sustainable future: how can financial institutions navigate climate risk?


To discuss any of the topics raised in this article, please contact Joel Sulkes.

Joel Sulkes
Global Financial Institutions Industry Leader
New York