Howden Resilience Laboratory: Microsoft Manages Climate Risk

International insurance group Howden has dedicated itself to making a significant impact in the realm of sustainability, benefiting not just its own operations but also its clients.
To further this commitment, Howden has unveiled the Howden Resilience Laboratory, a platform poised to redefine how clients handle and mitigate climate risks.
Lyn Grobler, Howden’s CIO, says: “Asset owners, investors and wider stakeholders face evolving and complex pressures from risks related to climate change.”
This move isn’t Howden’s first step towards innovative solutions. Previously, it had initiated an insurance innovation hub, aiming to nurture and elevate insurtech start-ups.
Introducing the Howden Resilience Laboratory
Leveraging Microsoft’s cloud services, the Howden Resilience Laboratory creates cutting-edge, data-centric solutions for tackling client challenges linked to climate change impacts.
Developed with Microsoft's Azure, Microsoft 365 and Dynamics 365, the lab equips enterprises with tools for climate scenario modelling and financial impact evaluations.
Lyn explains: “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.”
Handling extensive datasets encompassing environmental, societal, and financial variables, this platform distils complex data into tangible insights, aiding investors and stakeholders in comprehending and addressing climate risks more effectively.
How does the Howden Resilience Laboratory operate?
Key to the platform is its focus on advanced climate risk modelling and strategic scenario planning, providing firms with the capacity to make decisions that are not just reactive but resilient. It also enhances insurance and investment tactics, facilitating users to manage exposure and vulnerability shifts over time.
Bill Borden, Corporate Vice President, Worldwide Financial Services at Microsoft, says: “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.”
The platform's foundation is the Physical Climate Risk Assessment Methodology (PCRAM) put forward by the Institutional Investors Group on Climate Change (IIGCC), marking it as the first to directly link financial metrics, such as cash flow impacts, to climate risk for an enhanced and strategic climate risk assessment framework.
Howden's sustainability ethos
At the core of Howden’s sustainability ethos are three pillars:
- Transforming insurance narratives
- Conducting responsible business
- Giving back to the community.
In its 2023 sustainability report, David Howden, Founder and CEO, reflected on the insurance sector’s pivotal role in fostering a sustainable future.
He said: “2023 felt like a turning point in terms of recognising the role our industry has to play in building a more sustainable future. At COP28, insurance and de-risking – topics that had historically lived in the fringes – had become firmly embedded in the narrative.
“It’s hugely encouraging that others can see the value that we know insurance can bring — it is now incumbent upon us to continue to channel our collective efforts as a company, and industry, to drive, with urgency and at scale, the use of this powerful tool to drive the change needed to create a fairer, more resilient future for all.”
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