Aon taps academic partners to enhance climate risk modelling
Aon is to enhance its Impact Forecasting catastrophe model for severe convective storm (SCS).
The insurance broker said it will incorporate the latest climate science gained from a collaboration with academic researchers Dr. Robert Trapp from the University of Illinois at Urbana-Champaign, and Dr. John Allen from Central Michigan University.
The data from this collaboration will inform the SCS model’s computational analysis around frequency, severity and geographic distribution in respect of hail, tornadoes, and straight-line winds.
Aon said that other benefits will include the identification of high-risk and/or evolving areas of risk to support underwriting/pricing strategies, the ability to align reinsurance purchases with a more detailed understanding of this ‘secondary’ peril, the development of long-term climate change strategies for physical risk, an opportunity for enhanced reporting to external stakeholders such as regulators and rating agencies, and assistance in motivating best-practice resilience strategies to build better and smarter in high-risk areas.
Dr. Eric Robinson, a director and meteorologist for Aon’s Impact Forecasting team, said: “Dr. Trapp’s and Dr. Allen’s work in the field of climate change and severe convective weather represent a culmination of nearly 30-years of severe storms research.
“Their insight and expertise are essential in tackling a peril like this, where hazard uncertainty and small footprint sizes require a careful and experienced approach. This collaboration represents the best that academia and private industry has to offer, resulting in a more insightful, robust, and useful offering than either could produce independently.”
He added: “Our work together goes well beyond a simple resampling of historical events or an in-house view of risk based on an interpretation of the academic literature, and instead takes a first principles approach to derive a view of risk directly from the source – the academic experts at the leading edge of climate science. This collaboration brings together the very best from the insurance and academic worlds to take a fresh look at the problem and develop a view of risk that is both robust and useful to risk managers.”