Howden, the insurance intermediary group, has launched the Howden Resilience Laboratory, a digital innovation hub designed to transform how clients evaluate and manage climate risks.
Developed by Howden and powered by Microsoft’s cloud services–Azure, Microsoft 365 and Dynamics 365, the Resilience Laboratory enables clients to model climate scenarios and assess financial impacts.
It processes large volumes of complex data such as environmental, societal and financial, into actionable insights, to enable asset owners, investors, and other stakeholders to understand and manage climate risks more effectively. It also increases climate resilience and accelerates the energy transition.
The Howden Resilience Laboratory also offers advanced climate risk modelling which identifies residual risks to clients’ operational and financial performance and designs optimal insurance solutions. The platform also helps clients develop tailored ‘what-if’ models simulating potential outcomes of strategic decisions, including mergers, decarbonisation efforts, or new market expansions.
Additionally, it has optimised investment and insurance strategies, accounting for changes in hazard, exposure and vulnerability and can evaluate the financial benefits of investments in resilience, from supply chains to biodiversity and social impacts.
The Howden Resilience Laboratory uses industry research and partners with data and modelling experts, as well as The Microsoft Planetary Computer.
At Climate Week NYC 2024, Howden and Microsoft will showcase an automated modelling approach, developed in the Howden Resilience Laboratory, that enabled real asset investors to understand, pre-investment, the impact of physical climate risks on the asset. The approach also considers resilience strategies and their financial implications.
The solution is built in accordance with the Physical Climate Risk Assessment Methodology (PCRAM) curated by the Institutional Investors Group on Climate Change (IIGCC) and is the first to report on financial metrics such as cash flow impacts, taking climate risk assessment to new levels.
Mahesh Roy, Investor Strategies Programme Director, The Institutional Investors Group on Climate Change (IIGCC) said: “By streamlining the process, the Resilience Laboratory’s application of PCRAM offers the opportunity to broaden its use across sectors, providing insurers and investors with a practical framework to incorporate climate resilience into their decision-making. This consistent approach not only manages risks but also enhances asset value over time, ensuring long-term stability and unlocking opportunities for more resilient investments.”
Lyn Grobler, Chief Information Officer, Howden added: “Asset owners, investors and wider stakeholders face evolving and complex pressures from risks related to climate change. This collaboration with Microsoft allows us to create a world-class innovation hub powered by data, AI and computation to model climate scenarios and assess financial impacts, which will enable strategic and confident investment decisions that protect assets and businesses.
“Together with Microsoft, we will continue to integrate insights and collaborate with other data partners and researchers to help scale and build the tools and capabilities to de-risk financing decisions and accelerate the transition to a more resilient world.”
Bill Borden, Corporate Vice President, Worldwide Financial Services, Microsoft concluded: “At Microsoft, we are dedicated to empowering industries with the technology needed to tackle critical issues like climate change.
“The Howden Resilience Laboratory is using technology and data platforms to model, understand, and mitigate climate risks in ways that were previously unachievable. Together, we are helping businesses make informed decisions that not only manage risk but drive long-term sustainability and resilience.”
