Joining a highly regarded research hub will assist in the management and understanding of risk, a Bermuda-based executive at Axa XL has said.

Andrew MacFarlane, the head of climate at Axa XL, was speaking after the company and the Axa Research Fund announced that they have joined the Cambridge Systemic Risks Hub, which was created by the Cambridge Centre for Risk Studies to help mitigate systemic risks such as climate change, pandemics, cyber threats, geopolitical change and financial crises.

The hub focuses on gaining a deeper understanding of the interconnected nature of systemic risks, and explores the drivers, implications and potential solutions to inform and enable the insurance industry to better respond to current and future threats.

It fosters private-public collaboration to encourage sharing of expertise to develop new risk transfer products and advisory services.

Axa XL and Axa Research Fund will focus on climate transition risk as their contribution to the initiative.

The company said the climate transition is expected to have significant global implications for geopolitics, technology, social cohesion and business development affecting all countries and all sectors of the economy.

Mr MacFarlane said: “Evolving our 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.”

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

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.”

Axa XL said the research results will enable better collaboration with international bodies, national governments, and local authority administrations in policy-making around risk reduction and ultimately improve global co-operation in reducing systemic risk.

Funding will be provided by an international collaboration of companies including founding partners Axa through Axa XL and the Axa Research Fund.

The Cambridge Centre for Risk Studies is based within the University of Cambridge Judge Business School. The Centre works closely with business partners in tackling complex issues of management science in risk.

The Axa Research Fund is Axa Group’s global scientific philanthropy initiative, launched in 2008.

It funds independent research in key areas related to risk and helps inform public and private decision-making based on science.