Aon has expanded its Climate Risk Monitor solution, launched in March this year, to include enhanced flood risk capability through its most recent collaboration with flood expert, Fathom.
This partnership looks to assist clients to better understand the influence of a changing climate on flood perils worldwide.
The Climate Risk Monitor allows clients to visualize and analyse how their operations are exposed to physical climate risks, enabling more informed decision-making.
Aon data shows that the property insurance market is increasingly influenced by climate-related perils, with more than $125 billion of insured losses caused by weather-related catastrophes in 2024.
This new collaboration with Fathom enhances Climate Risk Monitor by incorporating high-resolution data for flood risk assessment. This allows clients to analyse flash, river, and coastal flooding, including rising sea levels, at a 10-square-meter resolution in the US, UK, and Japan, and 30 square meters in other regions.
“The addition of high-resolution flood data within Climate Risk Monitor provides forward projections of flood risk across a range of emissions scenarios, helping re/insurers to understand the insurability of the flood peril, as well as supporting due diligence and disclosure and regulatory requirements,” a spokesperson stated.
Climate Risk Monitor offers comprehensive climate risk modelling beyond just flood risk. It assesses the likelihood of various climate-related hazards, including drought, extreme rainfall, heat, freeze, tropical cyclones, and wildfires, under different climate change scenarios.
By providing diagnostic reports and geographical visualizations, it allows clients to understand the impact of these perils on individual assets, entire portfolios, as well as specific locations.
Fathom flood data is also incorporated into Aon’s recently certified Florida Flood v3.0 model from Impact Forecasting, which is available within the team’s ELEMENTS 18 catastrophe modelling suite.
Liz Henderson, global head of Climate Risk Advisory for Aon, said: “The dynamics of the flood peril are particularly sensitive to climate change, which raises growing concerns around global insurability and protection gaps, highlighted by the significant flood events of 2024.
“Our collaboration with Fathom will help to further enhance the value Climate Risk Monitor brings to clients, not just around physical risk management but also shaping better decisions on human capital in the areas of health, resource allocation and investment.”
Harry Vardigans, head of insurance at Fathom, commented: “Building on the success of our previous collaborations with Aon, it’s great to once again join forces to see Fathom’s high-resolution flood risk data integrated into Climate Risk Monitor.
“Armed with our flood risk intelligence, Aon’s clients can assess and manage their flood risk exposure for anywhere in the world, strengthening the creation of robust risk strategies in an era of increasing climate volatility.”
Climate Risk Monitor was designed to help clients assess and manage climate risk in locations expected to see increases. This supports risk mitigation and transfer strategies, demonstrates climate awareness to stakeholders, and aids in climate disclosures.
The tool also informs risk selection, pricing, and re/insurance renewals by leveraging Aon’s expertise to translate climate data into actionable insights for clients.
Henderson added: “Risk managers can use Aon data to better understand climate risk and, in turn, inform property insurance placements for their organizations, collaborating with Aon’s brokers to help obtain optimal limits and renewal pricing.
“As part of Aon’s Risk Capital capability, the firm brings broad expertise, relationships and analytics to help clients to unlock capital and mitigate risk.”
