Academic partnerships critical to establishing robust view of future climate risk: Aon

Partnerships with academia are a critical tool in enabling the industry to establish a future view of climate risk, according to Aon’s executive managing director and global head of catastrophe management Dan Dick.

In an ESG Insurer interview, Dick said academic partnerships can also provide a new source of talent for the (re)insurance sector, helping bring in important additional skillsets as the industry establishes more effective means of exposure management.

Aon has entered into a series of partnerships with academic institutions over the past two years, including engaging with the University of Columbia to better quantify the impacts of climate change on tropical cyclones.

The partnership sees Aon help fund the university’s research, which is then published and peer reviewed before being put in the public domain.

“We want that work to move into the public domain and be out there so everyone can benefit from it,” Dick said. 

“This is in part what has enticed universities to work with us. We don’t want to inhibit the publication of their work – the purpose is to have something very open.”

“We want that work to move into the public domain and be out there so everyone can benefit from it”

Dick said the focus within Aon’s Impact Forecasting unit was on the development of open and transparent models that allow clients to “turn all the levers they need” to develop their own view of risk. 

Previous partnerships unveiled by the broker also include an arrangement with academics at the University of Illinois and Central Michigan University geared towards enhancing its modelling tools for severe convective storms.

The broker also recently unveiled a partnership with the University of California to implement the latest climate change science and research into its US wildfire catastrophe model.

Dick said Aon is also working with the University of New South Wales as it builds its first Australian bushfire model.

“We think it’s a unique approach and shows business and universities can find a common ground,” he said.

“Many of the students at these universities are trying to figure out appropriate career opportunities, and much of their work fits nicely with what we do in the insurance space.”

He said this presents an opportunity for the industry to enhance its talent base.

“Many of the students at these universities are trying to figure out appropriate career opportunities, and much of their work fits nicely with what we do in the insurance space”

“We are hiring PhD students in fields such as climatology and engineering, which adds a robust skillset to the business. We need that kind of expertise on staff if we are to help clients build the view of risk they need.”

Dick said the need to address future climate challenges is increasingly recognised among C-suite executives.

“A lot of boards and management are now asking us how they should start to quantify the climate impacts of the future. 

“To do this you can’t just adapt models made for the climate in 2022 – you have to partner with someone who works in that field and understands future climate. This will give regulators, boards and senior management teams a more robust answer that they can have greater confidence in.”