A Canadian adaptation tool

Mary Lou O'Reilly in Canadian Underwriter: The Insurance Bureau of Canada (IBC) has been pressing the issue of Canada's aging water and sewer systems in recent years, particularly because of the threat of climate change and increased levels of heavy rainfall in key regions. However, many municipalities are overwhelmed by the sheer magnitude of the problem and the required investment. Should they invest in sewer systems? Wastewater treatment plants? Flood diversion plans?

In short order, they will have at least one part of the answer. The insurance industry is in the process of developing a risk assessment tool that municipalities can use to pinpoint the most vulnerable areas of infrastructure and direct funds accordingly. Insurance companies will also have the tool to rate and price property risks accurately.

…Insurers currently have fairly good retrospective data upon which to base their pricing. They can rely on claims histories to tell them at least part of the risk story. However, another part of the story can be told through the use of prospective data. For example, houses that suffered water damage in Hamilton were not located in a traditional "hot spot" for these kinds of water damage claims. It would have been very difficult, if not impossible, to forecast this event based on retrospective data.

The municipal risk assessment tool will address this "information gap" by collecting and analyzing key municipal data in the:
• age and design of sewer and surface water systems;
• maintenance and operation of those systems;
• urban development policies that influence system capacity; and
• topographical features like elevation and soil type, which affect risk and vary broadly within large urban centres.

…The municipal risk assessment tool is a vital project for the insurance industry, governments and all Canadians. It is one crucial part of what has to be a comprehensive plan to adapt intelligently to the very real challenges of climate change. There is a role for all levels of government, industries and citizens to play in this adaptation -- from representation at international meetings such as the UN Climate Change Conference in Copenhagen, to the use of powerful economic incentives to encourage change in consumer behaviour and individual responsibility (i. e. reducing water usage through things like rain barrels)….

A dog named Pima at the off-leash area at Cherry Beach, Toronto, Canada. The winter thaw had caused flooding. Shot by angelune des lauriers, Wikimedia Commons via Flickr, under the Creative Commons Attribution ShareAlike 2.0 License