United Kingdom

Aon’s Capabilities

Why Choose Aon?

Through our global, multidisciplinary team, Aon has the capability to provide data and analytical expertise to enable a deep understanding of your organisation’s climate risks. Our Aon United operating platform enables us to bring more of our firm to our client engagements, and most importantly, it empowers us to leverage the best of our firm for the benefit of yours.

 

    Benefits Uses Deliverables
Catastrophe Modeling Impact Forecasting, AIR
  • Insight into current physical risk from climate
  • Simulates thousands of scientifically probably events
  • Outputs a probability distribution
  • Set geographic risk tolerances and insurance requirements
  • Credit risk stress testing
  • Physical risk disclosure
  • Risk transfer pricing and structuring
  • Probabilistic/stochastic output
  • Average annual and probable maximum insured loss
  • Can be conditioned for climate scenarios
Climate Risk Modeling The Climate Service - Climanomics
  • Scientific analysis of the impact from climate change on natural perils
  • Scenario-based, outputs expected loss
  • Projects future decades to 2100
  • Translates climate physical and transition risk into financial impact
  • Provides a view of future climate scenarios that impact business decisions today
  • Scenario based output for RCP 4.5 and 8.5 pathways
  • Average annual economic loss on decadal periods to 2100
Mapping and Visualisation Impact on Demand
  • Location-based visualisation platform
  • Aggregates third-party data providers to create a customisable view of data and risk layers
  • Bring together catastrophe and climate model output into one platform
  • Enable a seamless integration of current and future climate analytics
  • Visualise exposure to physical risks
  • Set up real time event alerts
  • Real-time exposure summaries
  • Location Intelligence
Climate Risk Advisory and Risk Transfer Insurance, Capital Market Solutions
  • Aon helps clients to access the full insurance capital stack, from traditional programs through to solutions such as ILS
  • Bespoke insurance programs for financial institutions delivering credit, hazard and flood programs
  • Targeted coverage to address the “insurance gap”
  • Mortgage Impairment
  • LPI/REO insurance programs
  • ILS/Catastrophe bonds
  • Parametric insurance

 

In June 2020, Aon formally announced a collaboration with The Climate Service (TCS) to help clients understand and manage climate risk today and into the future. The decision came after deep investigations into the TCS methodology with our reinsurance analytics experts, which is reflected in a recent Forrester Research report that ranked different climate analytics providers. Our relationship with The Climate Service combines science and technology to measure, monitor and manage the financial impacts of climate on business and investments. The combined services bring together complementary analytics with a climate focus.

The TCS Climanomics® analytics platform enables reporting and disclosure consistent with the TCFD framework and empowers decision-making by putting a price on both transition and physical risk. With multiple climate scenarios covering present day to the year 2100, insights from the platform help investors and businesses manage risk, build resilience, and drive change.

Aon is also a member of ClimateWise, an organisation comprised of members from the insurance industry that is dedicated to communicating, disclosing and responding to the risks and opportunities associated with the growing divide between total economic and insured losses attributed to climate change.

Aon’s Approach to Climate Change

Greater attention is being paid to climate change, where the effect of greenhouse gas (GHG) emissions is predicted to raise global temperature. It is also anticipated that extreme weather events may become more likely in certain regions and potentially more intense. This focus is driving global economies towards carbon neutrality, and that philosophy reinforces the general trends of sustainability and corporate social responsibility.

The effects of climate change risks are felt across all activities of a business – the value proposition, properties, staffing, supply chain, and so forth. The challenge for businesses, industries and investors is to understand this changing risk profile, particularly in the management of transitions as industry attempts to maintain resilience in the course towards a zero-carbon future.

Climate Modelling

Climate model’s downscale climate science into scenario-based narratives that describe both physical and transition risk.

Climate models can:

  • Provide a translation of climate risk into financial metrics at an aggregate or per peril basis
  • Look at different time horizons and scenarios which illustrate critical decision pathways
  • Allows implementation of climate science into investment and strategic decision making
  • Enable risk consulting to align climate analytics into total cost of risk approach, balancing retention, risk control/mitigation, and transfer according to appetite
  • Align to and must be led by a governance approach.

The Climate Service - Climanomics®

Aon is excited to offer our agreement with The Climate Service to deliver data and insights into climate-related natural hazards for our clients. The Climate Service (TCS) provides climate risk analytics to investors and businesses with support from a scientific team and advisors including four IPCC Nobel Prize-winning scientists. The TCS Climanomics® analytics platform enables reporting and disclosure consistent with the TCFD framework and empowers decision-making by putting a price on both transition and physical risk. With multiple climate scenarios covering present day to the year 2100 and ‘one-click’ property/property and portfolio-level analysis, insights from the platform help investors and businesses manage risk, build resilience, and drive change.

Climanomics® risk analytics system is TCS’s web-based software that provides clients with knowledge of what their risks are, where they are, and what trends they can anticipate over decades and across multiple scenarios so that they can manage these risks strategically. From portfolio management to due diligence to arbitrage on over/under-valued properties, the information provided by the Climanomics® system enables us to help clients embed climate risk into their operational and strategic financial decisions.

Climanomics

 

Thought Leadership

© Copyright Aon UK Limited. All rights reserved. Aon UK Limited is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate us for this product or service as it is part of Aon’s Trio Risk Management process and services. Aon UK Limited. Registered in England and Wales. Registered number: 00210725. Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN. Tel: 020 7623 5500. FPNAT547