Both AXA XL and the AXA Research Fund have joined a research hub created by the Cambridge Centre for Risk Studies (CCRS) to help mitigate systemic risks like climate change, pandemics, cyber threats, geopolitical change and financial crisis.
According to the announcement, the Cambridge Systemic Risks Hub has a particular focus on gaining a better understanding of the interconnected nature of systemic risks.
The Hub also explores the drivers, implications and potential solutions to inform and enable the insurance industry to better respond to current and future threats.
At the same time, the hub enriches private-public collaboration in order to encourage greater sharing of expertise and knowledge, in order to develop new risk transfer products and advisory services.
Both AXA XL and AXA Research Fund will be focusing on climate transition risk as their contribution to the initiative.
In addition, the climate transition is anticipated to have “significant global implications” for geopolitics, technology, social cohesion and business development impacting all countries and all sectors of the economy.
Dr Michelle Tuveson, Executive Director and Chairman of the Advisory Board at CCRS, commented: “We are honoured to be leading this research hub – this pool of expertise will be invaluable in steering our research as we look to create new private market risk management products and services.”
Andrew MacFarlane, Head of Climate at AXA XL, said: “Evolving our assessment of risk management from linear thinking to a more systemic approach will enhance our ability to manage and understand increasingly complex and interconnected risks. CCRS has longstanding expertise in this area and working alongside them will enable us to identify opportunities to support our clients while they navigate a constantly changing risk landscape.”
Martin Powell, Group Head of Sustainability, AXA, added: “Collaborating in this way aligns with the AXA Research Fund’s mission of helping to inform public and private decision-making based on science to tackle the key issues of our time to protect the planet, communities and society as a whole.”
Moreover, the research results will play a key role in enabling better collaboration with international bodies, national governments, and local authority administrations in policy-making around risk reduction, and ultimately improving global cooperation in reducing systemic risk.
Dr Andrew Coburn, Chief Scientist at CCRS, said: “Systemic resilience needs the foresight of systemic backstops to which capital markets can respond. Modelling to support new financial instruments will be critical in addressing future crises.”
Professor Daniel Ralph, Academic Director at CCRS, stated: “GDP-sized government interventions have been the solution to pandemic-sized events, but government action at this scale is typically ad hoc – better regulatory and financial structures are needed to protect societies from long-term erosion of wealth.”
Dr Trevor Maynard, Director of Systemic Risk Research at CCRS, commented: “We are delighted that AXA XL and AXA Research Fund have chosen to explore climate transition risks as part of our broader focus on global systemic threats. We hope our work can help businesses to better navigate the multiple potential futures that might occur.”
Meanwhile, AXA XL Risk Consulting recently launched AXA Immersive Solutions, a training solution that uses Virtual Reality (VR) and Digital Twin technologies.
