Increasing weather risks demand new strategies and approaches: Aon report

Aon’s 2024 Client Trends Report outlines four megatrends impacting global business, with one of them being weather, driven by the escalating frequency and severity of extreme events, compelling organisations to manage climate risk in an increasingly holistic way.

With climate change escalating the occurrence and intensity of natural disasters and extreme weather events, the resulting economic and social consequences are substantial.

Aon asserts that companies must leverage data and tools, such as climate modelling, to gain deeper insights into their exposure to climate risks, develop effective risk mitigation strategies, and unlock capital.

Moreover, given the scale of climate change, there will be a heightened emphasis on public-private partnerships to bridge the protection gap and mobilise capital for the advancement of green technologies.

Additionally, companies are increasingly aware of their climate-related responsibilities to regulators and shareholders, encompassing both compliance and communication aspects.

Furthermore, the impact of weather and climate on the workforce can be profound, with workforce health and safety emerging as primary concerns for employers, especially considering significant fatalities resulting from natural disasters such as earthquakes and heatwaves in 2023.

The report also delves into three additional trends: trade, technology, and workforce. Each presents organisations with numerous complexities and evolving risks, necessitating the development of new workforce strategies and a holistic approach to risk management.

To effectively address these challenges, Aon aims to assist clients in making informed decisions to safeguard and grow their businesses through its Risk Capital and Human Capital capabilities.

In the realm of Risk Capital, Aon helps clients reassess their risk management strategies from a holistic perspective, while in Human Capital, it supports the adoption of a more integrated approach to workforce strategies.

Eric Andersen, President of Aon, remarks, “Every day, our clients across every industry and region tell us that it’s getting harder to make the right decisions amidst the volatility and complexity created by these megatrends.

“Trade is becoming more regional and supply chains are evolving, clients are trying to manage weather risk, technology and AI are affecting our clients and their businesses and workforce behaviours and expectations are shifting.

“This is why we introduced our 3×3 Plan to go further, faster to accelerate our Aon United strategy and bring actionable analytic insight, globally integrated expertise and locally relevant solutions to help them act now on Risk and People issues and make decisions with clarity and confidence,” Andersen concludes.

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