Behind Howden’s Resilience Laboratory, Backed by Microsoft

International insurance group Howden is committed to making a positive impact when it comes to sustainability, both for itself and that of its clients.

In a bid to further accelerate this journey, Howden has introduced the Howden Resilience Laboratory — a platform designed to transform how clients evaluate and manage climate risks.

Lyn Grobler, Howden’s CIO, said: “Asset owners, investors and wider stakeholders face evolving and complex pressures from risks related to climate change.”

This is not its first foray into innovation, however. Last year, Howden launched an insurance innovation hub as part of its plans to support and grow the number of insurtech startups coming through the ranks.

What is the Howden Resilience Laboratory?

Powered by Microsoft’s cloud services, the Howden Resilience Laboratory provides innovative, data-driven solutions for client challenges associated with the impacts of climate change.

The lab is developed using Microsoft's Azure, Microsoft 365, and Dynamics 365 to provide businesses with the ability to model climate scenarios and assess financial impacts. 

Lyn added: “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.”

By processing large datasets — including environmental, societal and financial factors — the platform turns complex information into actionable insights. 

This, Howden and Microsoft believe, enables investors, asset owners and stakeholders to better understand and mitigate climate risks.

How the Howden Resilience Laboratory works

The platform focuses on several key features, including advanced climate risk modelling and strategic scenario planning, giving businesses the tools to adapt and make more resilient decisions. It also optimises insurance and investment strategies, helping users account for changes in exposure and vulnerability over time.

Bill Borden, Corporate Vice President, Worldwide Financial Services at Microsoft, said:  “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 solution is based on the Physical Climate Risk Assessment Methodology (PCRAM), developed by the Institutional Investors Group on Climate Change (IIGCC). 

It is the first platform capable of reporting on financial metrics, such as cash flow impacts, directly tied to climate risk, offering a more advanced and strategic climate risk assessment framework.

Climate Week NYC 2024

During Climate Week NYC, Howden and Microsoft will showcase a climate risk modelling solution developed within the Resilience Laboratory. 

This allows investors to understand, pre-investment, the impact of physical climate risks on the asset, Howden says.

Sister title Sustainability Magazine is also at Climate Week in New York for Sustainability LIVE Climate Week NYC.

To discover the full agenda, click here.

Howden’s sustainability strategy

The three main pillars of Howden’s sustainability strategy are:

• Changing the insurance narrative
• Being a responsible business
• Giving back

In its 2023 sustainability report, Founder and CEO David Howden said that insurance has the power to give people the confidence to invest in the 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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