Axa partners with research hub to mitigate climate transition risk

Axa XL and its research fund arm have joined the Cambridge Centre for Risk Studies’ (CCRS) hub to help mitigate climate transition risk, a statement released today (23 October 2023) said.

The CCRS analyses systemic risks with the aim of helping the insurance industry better respond to current and future threats, including pandemics and cyber threats.

Axa said it will focus on climate transition risk as their contribution to the initiative.

Transition risk, according to the National Association of Insurance Commissioners (NAIC), is the potential costs to society of changing to a low carbon economy to mitigate climate change. 

Andrew MacFarlane, head of climate at Axa XL, said that evolving the insurer’s 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,” he added.

Cooperation

Funding for the research will be provided by an international collaboration of companies.

Axa felt the results would enable better collaboration with international bodies, national governments and local authority administrations in policy-making around risk reduction and improve global cooperation in reducing systemic risk.

Martin Powell, group head of sustainability at Axa, said: “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.”

The research fund has supported over 700 research projects since 2008, while it has also partnered with more than 330 academic institutions in 38 countries.

Dr Trevor Maynard, director of systemic risk research at CCRS, said: “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.”