Hurricanes and polar vortexes and drought, oh my. In 2020 alone, global natural disasters caused more than $268 billion in economic damage. Aon is constantly working to prepare clients for catastrophic weather events and the impact of climate change. On this episode of “On Aon,” host Maria Harshbarger, Health Solutions Chief Client Officer at Aon, is joined by Aon’s Head of Catastrophe Insight, Steve Bowen, for a conversation about extreme weather events and helping clients prepare for long-tail risks.
Hurricanes and polar vortexes and drought, oh my. In 2020 alone, global natural disasters caused more than $268 billion in economic damage. Aon is constantly working to prepare clients for catastrophic weather events and the impact of climate change. On this episode of “On Aon,” host Maria Harshbarger, Health Solutions Chief Client Officer at Aon, is joined by Aon’s Head of Catastrophe Insight, Steve Bowen, for a conversation about extreme weather events and helping clients prepare for long-tail risks.
Additional Resources:
NOAA: The National Oceanic and Atmospheric Administration
What can we learn from 2020’s natural catastrophes? Access the latest Global Catastrophe Recaps from the Aon team here.
Learn more about Steve and his role in his “I’m From Aon” feature video.
As Aon’s unofficial Chief Meteorologist, Steve frequently speaks with media about catastrophic weather events. See past materials on: floods, derechos, hailstorms, wildfires, climate change and, well, 2020.
A podcast veteran, Steve was a guest on the Weather Geeks podcast in 2019.
Meteorology and Metallica tweets @SteveBowenWx
Tweetables:
“The weather is critical for basically everything that we do.” — Steve Bowen
“It’s becoming more and more obvious that climate change is having a real impact on day-to-day weather events.” — Steve Bowen
“The climate change train has really started to roll and it’s not going to be stopping once it’s going down the tracks.” — Steve Bowen
Voiceover:
Welcome to “On Aon,” a podcast featuring conversations between colleagues on, well, Aon. This week, we hear from Steven Bowen about extreme weather events and helping clients prepare for long-tail climate risks. And now, this week’s host, Maria Harshbarger.
Maria Harshbarger:
Hello, everyone. It's great to be back with you on Aon. My name is Maria Harshbarger and I've been with the firm since 2003, serving as our Chief Client Officer. Today, with me is Steve Bowen, who has been at Aon for almost 14 years. His official title is a Managing Director and Head of Catastrophe Insight. His unofficial title is chief meteorologist. I'm especially excited because I didn't know that I had a colleague who was a meteorologist. Thanks, Steve, for being with us here today.
Steve Bowen:
Thank you for having me. Us meteorologists, there's not a lot of us, but we tend to lurk behind the shadows every once in a while. You never know when one of us might pop up.
Maria Harshbarger:
Which leads me to the inquiring minds want to know about how did you get into meteorology? What attracted you to this area of expertise?
Steve Bowen:
Sure. Really, my story is not all that different from a lot of folks that are meteorologists, where I really was bitten by the bug, so to speak when I was a little kid. I was living in South Bend, Indiana, and we had a weak tornado that came down our streets in our neighborhood and downed some trees onto some neighbor's property. I was really fascinated by the power and fury of mother nature. It was something that really stuck with me and it sticks to me today. I grew up watching a Chicago meteorologist known as Tom Skilling, or on the Weather Channel, which is a big station in the US, Jim Cantore, or John Hope and a lot of those folks. It's been a fascination since I was a little kid and I've been really lucky, frankly, to be able to grow up doing what I've always wanted to do.
Maria Harshbarger:
Who would have thought that a tornado would have had an impact, or Tom Skilling, and I know who you're talking about as a fellow Chicagoan, of leading you to something that I feel the passion in your voice about meteorology. I think we're going to have just a great time talking with you today on that. with that all in mind and moving from tornadoes to something else, which is the peak of the season in the hurricane season, which I'm all too familiar with. My daughter, being in North Carolina and specifically in Wilmington, experiencing several hurricanes in the past few years. I'm interested to know what sources do you look to for drawing the prediction of what impact the weather is going to have, and can you tell us a little bit about how do you start?
Steve Bowen:
Sure. For me, everything starts and ends with the US governmental agency called NOAA. That stands for National Oceanic and Atmospheric Administration. That is really the organization that houses all current and archived weather data. That's where I go to first, just to see what the forecast looks like. If I want to look at various forecast computer models to get a sense in terms of what things are going to look like, whether it's just my walking out the door. Do I need to bring the umbrella today? Or if it's something more significant, like if we're looking to see where, say, a track of a hurricane may be potentially going, that's really the one-stop shop that would be looked to.
Steve Bowen:
Now, there's certainly other private or academic institutions, say Colorado State University, which they do hurricane, seasonal forecasting. Now, they're all basically using that data that's coming out of NOAA. They're just using it and basically packaging it up to something else that they're going to use then distribute to the public as well. NOAA, it's a really important part of the government. I mean, NOAA really was an agency that the governments around the world have emulated by creating their own weather service groups. Yeah, it really does start and stop there. As we continue to get more improvements, technological speed and advancements there, that's really only going to help us in terms of our forecasting capabilities in the future.
Maria Harshbarger:
Interesting. I never knew that that existed. Moving on to our next question, how do the changes in the weather patterns affect our relationships with clients?
Steve Bowen:
Sure. Obviously, the weather is critical for basically everything that we do. I mentioned the example of how we use different types of forecasting, whether it's what I need to know walking out the door, or something more broader scale in terms of whether something more significant can happen that could be potentially damaging to my home or my business. We are constantly trying to get a good sense of the data and how weather events continue to evolve. In terms of climate change, we know that that is having an increasing impact on specific weather events. That's leading some more of this unusual type of storm occurrence, or just event behavior. That's something that's increasingly important in terms of how we define that for clients, trying to show these examples, whether it's the extreme heat that causes massive heat stress in the Pacific Northwest and the US earlier this summer, or the incredible amounts of rainfall that fell in Europe in July of 2021 that caused extensive damage there. We are seeing it with our eyes more frequently and, frankly, it's becoming more obvious that climate change is definitely having a more real impact with day-to-day weather events.
Maria Harshbarger:
Yeah, for sure. There's a couple of things that you said, so it starts with data. Data informs us from looking at the past, but then patterns that we see in the future and then the impact that it has, not just to the landscape, but overall to our clients and to their business in a very material way. I think interesting how it all comes together. You talked about climate change and climate change has been talked about before. In fact, it was our very first podcast that we had. Can you go further into climate change. You mentioned several with the heat in the Pac Northwest, the rains they experienced in Europe. I know my family was directly impacted by those rains and it was devastating. Tell us more about your thoughts on climate change and actually, how are we helping our clients prepare for those different types of outcomes?
Steve Bowen:
Sure. Like you said, everything really does start with data. Having these really data-driven sets of analysis that we're then able to qualitatively basically tell a story for our clients, but I really think the most important component of this is just the communication aspect of it, because it's just such a touchy subject, especially politically in some areas. Because there's been such a movement in terms of whether it's governmental bodies, or regulators are starting to tell companies, "Hey, you have to start planning for climate change. You have to start doing these stress tests." I mean, especially in say Europe where you're mandated. If you're doing anything around the financial markets, you have to conduct these stress tests to assume certain scenarios, certain events and what that's going to look like, or what it's going to do to your bottom line. Companies are really having to start for this. I mentioned the example in Europe.
Steve Bowen:
It's starting to trickle into the United States, places like New York and California, even Vermont is now starting to have these types of mandatory requirements, but this is something that's not going away. I think we've definitely seen governments themselves start to commit to more net zero promises. I know Aon, we've committed to a net zero carbon emissions here by 2030. Companies are really starting to take this more seriously. It's not just the physical risk, it's also the transition risk and trying to come up with ways that's going to be more financially salvageable for companies as they go in the future because the train has really started to roll on and it's not going to be stopping and going down the tracks.
Maria Harshbarger:
I think our ability to anticipate what we see could happen, looking at the government requirements that you just mentioned and how that impacts the way a client runs a business and then prepare your clients for what's ahead is all part of what we do. Interesting of the behind the scenes of how we actually do it and get it done. Probably one of my last questions is this. The last two years, you cannot watch the news read whether a newspaper and social media, COVID has dominated our world, but we're also seeing all of the different major weather events, which you mentioned just a few and there's been so many. Are we looking at disasters differently? Are we viewing these differently than we have in the past?
Steve Bowen:
Yes.
Maria Harshbarger:
Well, tell me more about that. I walked right into that one.
Steve Bowen:
We really are. I mean, I think back to two, three years ago, and if I would have told myself or asked anybody, "Hey, can you imagine that we'd be seeing all these record level events in terms of weather on top of or occurring at the same time as a global pandemic?" I don't think anybody would have assumed the answer would be yes to that. What's really started to change our mindsets is the fact that we are seeing these larger scale events that are taking a much longer period of time to assess and to really help clients get a full view of the damage that's been incurred. Then in turn, turn around and help them in terms of the rebuilding process and building back better, building smarter, doing things that really are taking into account the assumption that future impacts are going to be even more significant with the assumption that events are going to be more intense when they occur.
Steve Bowen:
In terms of just overall disasters, I mean, I know we tend to primarily focus on physical risks, but there's also these non-physical risks, these secondary and tertiary effects, things like supply chain, which are all connected and may not be the primary focus that we see in the media, but it's really an important part of the conversation that we have here. Things like COVID, which has led led to a reduction in terms of the amount of available supply, lack of labor, the costs of things. Lumber costs have skyrocketed to levels that we've never seen before, having to think of all these different things and also, the microchip shortages that we're seeing in terms of the automotive industry. There's countless examples of how COVID and what we call a natural disaster, a natural peril happening concurrently at the same time with these natural disasters, it really does change [inaudible 00:12:47] of how we're planning, how we're thinking about it, and recognizing that it's not just the physical damage at the point of the event occurrence, it's all these additional impacts that can be felt on the other part of the world.
Maria Harshbarger:
I think it goes to what we see and then what we don't see, but what you experience, whether you're building a home and not just the shortage of lumber, but the cost of lumber or buying a car with the microchip. I didn't even think about it, but now is not the time because the production is just not there. It's those things that we feel in a different sense from that change that we're seeing in the area of these disasters that are happening within the weather. So interesting. I know you could talk for a long time. Actually, I could listen for a long time because this is really interesting for me, but you can't get off the hook of one of these On Aon podcasts without a question that is going to be for fun. My fun thing that I've heard through the proverbial grapevine is that you are a huge Metallica fan. I have to ask, and what our viewers can't see, but I can see is all of these cool posters in the background is what's your favorite album or concert from your favorite band?
Steve Bowen:
Yeah, it's been funny. I think a lot of people have known that I'm a big Metallica guy, but within the last 18 months of Zoom meetings and WebEx calls and everything else, people seeing my home office set up and all the Metallica posters on the wall, that I've really been outed when it comes to my super fandom. In terms of favorite album, that's pretty easy for me. It's Master of Puppets. I just don't think there's a better album or frankly, but the title track is the best song ever written, but we can get into a very deep, intense debate on that later. Favorite concert, I would say probably December 2011 in San Francisco. They played a 30th anniversary show at a small club called the Fillmore. Metallica invited Ozzy Osborne from Black Sabbath, Judas Priest, Rob Halford, their lead vocalist. Basically, a who's who within the metal community came out and played a bunch of songs with them. It was just a really, really unique and fun environment. I'm a metal head and now that it's out, I'm very happy to wave that flag.
Maria Harshbarger:
Well, you're speaking to a fellow a metal head. I wish I knew you in 2011, so I could have gone to that, or at least learned of that great venue that you went to. I know I'm a bit older than you, but in 1988, I was at the Monsters of Rock at Alpine Valley in Wisconsin listening to the opening band, Metallica. I think we were destined to meet. That's the bottom line.
Steve Bowen:
I wish I could go in a time machine. That would have been a great show.
Maria Harshbarger:
Oh, that it was. That it was. Nine hours of heavy metal. You can't beat it.
Voiceover:
This has been a conversation “On Aon” and helping clients anticipate and navigate catastrophic events. Thank you for listening. If you enjoyed this week’s episode, tune in in two weeks for a discussion with Aon's Affinity team. To learn more about Aon, its colleagues, solutions and news, check out our show notes, and visit our website at Aon dot com.
Steve Bowen:
As my wife likes to point out, I'm a very unique person. That I love Metallica or death metal and all this crazy, extreme stuff, but then I love Everybody Loves Raymond. I don't have any tats. I have no piercings. I have nothing.
Producer:
Add that to the show notes, Marian.
Steve Bowen:
I'm really clean-cut, just nerdy metal head-
Producer:
Metal guy.
Steve Bowen:
And a jock too on top of everything else, so I'm all over the place.
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