For over ten years Aon have been part of a unique university collaboration called ClimateWise, the insurance industry’s climate risk and societal resilience group, which brings together organisations from across the insurance industry with academics from various universities.
Many academic partnerships with business are discrete and client driven. Aon has leveraged these partnerships successfully through Aon Benfield Research. Facilitated by the University of Cambridge’s Institute for Sustainability Leadership (CISL), ClimateWise offers Cambridge connectivity and expertise to ClimateWise members, giving organisations and academics from a range of institutions access they might not have otherwise. Over the past 18 months Aon has been deeply involved in two initiatives that have brought together the university, academics, and our own Aon experts.
“Across Aon, we take the findings of ClimateWise action research to develop and deliver client solutions on the critical issue of climate risk.” Greg Lowe, Aon Global Head of Resilience and Sustainability
The first initiative, the Investing in Resilience research project, explored how the insurance industry can use its expertise in risk quantification, its sizeable balance sheets and its key stakeholder partnerships to enable cities and communities to become more resilient to the physical risks of climate change. The research project involved a year-long series of roundtables facilitated by CISL, also involving academics from the London School of Economics, and civil society organisation.
Aon offered its own experience and ideas, while providing feedback to the academics and report authors. The final report was widely circulated within the insurance industry and has allowed Aon to develop deeper dialogues about the opportunities: both internally and with clients. The output of this report – the harnessing of academic expertise and it’s mergence with industry experience – has strongly shaped Aon’s city infrastructure and resilience strategy. We are now having new dialogues with our clients and connecting them with the academics involved in the report where beneficial.
Projects are overseen by the ClimateWise Advisory Council, made up of senior industry leaders and regulators, and the Council is currently running two further schemes. Aon has been deeply involved in one of these schemes, the Physical Risk Initiative. Similar to Investing in Resilience, the scheme involves independent academics working as consultants, along with ClimateWise members and wider involvement of CISL’s sustainable finance initiatives.
Involvement with the Physical Risk Initiative has brought key reinsurance colleagues into direct contact with CISL, allowing Aon to model products and strategies on the issue of physical risk in the banking system. When the report is completed, Aon and other ClimateWise members will have deeper insight to address physical climate risk in the banking system with insurance products and tools, such as modelling expertise.
This pre-competitive research requires a neutrality that only a university such as Cambridge can bring as convener. “Access to ClimateWise’s insights and connections with academics and regulators is what provides the leverage to engage colleagues and the wider insurance industry on this topic, and allows us to work together to address real issues,” says Aon Global Head of Resilience and Sustainability Greg Lowe. As ClimateWise enters its second decade, this networked partnership will continue to lead the way in bringing the range of academic, commercial, and policy expertise required to ask the difficult questions of the industry, and to facilitate impact on insurance and global societal resilience.
This article first appeared in the 2018 State of the Relationship report, commissioned by Research England and compiled and published by NCUB.