The Howden Resilience Laboratory
The new client-centric innovation hub from Howden, supported by Microsoft.
Helping leaders optimise the big decisions ahead
Climate change is already with us, visible in insurance claims data. Its political, social and legislative impact will rip through the whole global economy over the next few years. Change will be radical.
For business leaders, there will be new technology investments to consider. New stakeholder expectations. New legal hoops to jump through. New ways to fail or prosper.
With so many new variables in play, it is highly likely that the analytical models that you use to weigh options and decide actions are no longer fit for purpose.
For example, climate change is causing an increase in small to medium flooding events, a trend we expect to worsen over time. Therefore, a property that looks a good investment today could be flooded frequently over the next 10-20 years. This would affect business revenues, insurance costs and resale values. If you've loaned money to finance the deal, you could be in negative equity. Yet it still might represent a good opportunity, if all the pros, cons and risk management measures could be priced in. The question is, are you equipped to factor in so many variables?
That's just one example. There are countless others. Every organisation will have a different set of risks to understand, measure and plan for.
The Howden Resilience Laboratory, supported by Microsoft, is your opportunity to upgrade your analytical capabilities to be relevant and optimised for the new climate-complex economy.
What is The Resilience Laboratory?
The Howden Resilience Laboratory, supported by Microsoft, is a collaborative space to work through the challenges and opportunities of the transition.
Its core function is to develop analytical solutions that provide valuable insight around specific problems affecting your business, organisation or community.
The Resilience Laboratory is not purely academic or theoretical. It is 100% focussed on your needs, and the actions you can take to solve problems - or maximise opportunities.
Connect with The Resilience Laboratory to:
- Talk through your challenges and concerns
- Investigate how climate change and its knock on effects will affect your business specifically
- Incorporate the latest research and subject matter expertise into your thinking
- Create action plans that are fit for purpose in the climate-complex economy
Understand The Resilience Laboratory in 90 seconds
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We invite business leaders and strategists to bring their specific problems, questions or challenges
Which climate change adaption proposals will deliver most benefit?
What do we need to do to reduce our climate liability risks and future claims?
How do we price local climate risk scenarios into our activities across the world?
Where are the greenwashing risks within our supply chain?
Will this project / asset be insurable?
What climate risk management do we need in place for investors and lenders?
How do we embed climate risk insight into all financial decisions?
How can we reduce our cost of capital?
How can we manage rising insurance costs?
What are the 'known unknowns', what are we missing?
What opportunities exist for a company like us?
How can we get ahead of the competition?
The above are just examples. There will be many more and you will have your own.
In practice, we can leverage data and the relevant expertise to analyse any climate or nature related business decision or problem.
Other key themes The Resilience Laboratory can tackle:
- Electric vehicle utilisation
- Supply chain analytics
- Food supply trends
- Resilient cities
- Building stock assessments and upgrades
- Governance failures
- Refinancing
- Emissions monitoring
- Water scarcity risks
Build climate complexity into your decision-making processes
As your stakeholders become more demanding about climate-related change, decisions are likely to be challenged, and so need to be defensible.
Everyone who is empowered to make decisions in your business will need to update their knowledge on climate issues and the knock on effects.
Climate risk is a complex topic and the subject of reams of ongoing research.
The research embraces many disciplines: various branches of science, technology, engineering, financial services and many more.
The majority of business leaders are not across all of this subject matter, but are being called upon to make decisions based on it.
And there is just so much data involved.
For example, the Microsoft Planetary Computer has several petabytes of data. To give that some context, just two petabytes is equivalent to 500 million songs. That is 5x as many as Spotify.
That's an overwhelming amount of data for anyone - and it is just one of many relevant sources.
The Resilience Laboratory can provide the tools you need:
- Technology solutions that build climate factors into your go/no-go decisions
- New calculations and metrics for your financial models
- Access to the most relevant, reliable data, on demand
- Integration with your existing tools, for speed and ease of use.
- Solutions designed around you
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Predictive technologies are evolving rapidly – don’t get left in the dark
The capability to spot trends and foresee future events is increasing at a dramatic rate.
Microsoft is at the forefront of this revolution, through initiatives like Project Aurora.
Aurora combines large-scale AI analytic models and a range of appropriate physical sensors. For example, wearable technology combines with AI when predicting heart disease.
In the same way, Aurora uses weather station sensors and AI to examine atmospheric chemistry trends. This has greatly enhanced our ability to predict future pollution levels and extreme weather events.
These are just two examples where AI is vastly improving the speed and accuracy of predictive technologies.
In practice, the applications are very broad and highly customisable to your needs. In the right hands, cutting edge analytics and climate expertise can help support clarity and confidence in any decision-making function of your business.
Transparency is vital for credibility
Many information providers implementing AI technologies take a black box approach: machine learning arrives at recommendations and there is no easy way to verify or justify how it arrived at them.
This can make for difficult conversations with all sorts of stakeholder groups, especially investors and financiers.
Our preferred approach is much more transparent in the way data is selected and these technologies are applied, with a capability and willingness to ‘show our working.’
This is the big differentiator of our offering.
We’re completely open about how it all works, and we're happy to explain in detail to your stakeholders if that's what's needed.
Insurance and insurability: changes here can affect your business, positively and negatively
Climate change will affect the availability and pricing of insurance.
Over the last five years, (re)insurers have seen average annual losses from natural catastrophes grow. Figures now exceed $100 billion. These are the highest loss figures ever recorded. More than double the five-year average from twenty years ago.
The main source of these losses isn’t the huge disasters that make the international news.
Business interruption and supply chain disruption will become much more common.
This needs to be priced into the financial modelling, to varying degrees, of every type of business operation.
The Resilience Laboratory is fully equipped to help you navigate this problem.
Opportunities for innovators and early adopters
New technologies will provide opportunities to adapt, even carve out a competitive advantage. This could involve being a player in new technology markets, or an early adopter.
The risks of making such bold moves often sit outside the risk appetites of your usual avenues of financial support.
Here, insurance markets can play a valuable role, stepping in to guarantee financial returns to investors and lenders.
To achieve such coverage, insurers and risk engineers need to be engaged early on in projects.
In the near future, the opinion of insurance risk engineers, will be more important than ever before. Their insights will be vital to making projects bankable. To achieve insurability, risk management thinking will need to inform early-stage technology, design choices, construction techniques and operating models.
Connect with The Resilience Laboratory to unlock financing options that may not be otherwise viable.
5 ways we can help you adapt
The insurance markets will have a huge role to play in the coming years. The Resilience Laboratory can add great value by fostering collaboration between clients and insurers.
1. Thinking about insurance policies in multiyear horizons, aligned to loan tenors
2. Engaging the insurance market early in projects
3. Doing cost benefit analysis of climate de-risking initiatives
4. Increasing awareness of innovative insurance products that solve the insurability problem
5. Supporting efforts to build capacity around emerging risks.
It's time to take action
Whatever the type of organisation you're part of. However long you plan to be there. Climate needs to be part of the strategy conversation today.
Because rising global temperatures will affect everything, directly and indirectly.
Over the next few years, whole economies that grew up on the environmental conditions of early 20th century will need rebooting. In the course of doing so, trillions of dollars will change hands, in a full-blown economic revolution.
Businesses will strive to remain relevant, and turn adversity into opportunity. Agile decision making will be a big success factor.
The Howden Resilience Laboratory, supported by Microsoft, is here to help you get the big decisions right.
Our data driven insights will help you:
- Visualise your organisation’s specific problems
- Enable real understanding across multiple disciplines
- Foster genuine collaboration in your organisation or sector
- Build consensus on the way forward
- Bring clarity into circuitous discussions