This topic contains 4 replies, has 3 voices, and was last updated by  Aaron Sutherland 7 months, 1 week ago.

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  • #1281

    Aaron Sutherland
    Participant

    My name is Aaron Sutherland and I am Vice-President, Pacific, for Insurance Bureau of Canada (IBC). We are the national association of Canada’s private home, auto and business insurers. While my industry is concerned about just about every risk facing Canadians, one of our priorities is increasing our resiliency to flooding. As our climate changes and our weather gets warmer and wetter, we’re seeing more floods happing more often. And with current snowpack’s well above normal (and upwards of 150% in the Okanagan), the risk this year is great. With new flood insurance products now on the market (more on this below), insurers are increasingly being looked to as second responders in the aftermath of these disasters, as customers rely on us to support and guide them through the rebuilding process, and in helping them return their lives to normal.
    I will guide this discussion from April 26th to May 2nd.

    The rising cost of floods

    As you would expect, Canada’s insurers have seen an increase in claims for property losses related to flooding. Thirty years ago, and adjusting for inflation, insurers paid out about $200 million a year in weather-related losses in Canada. Now they pay out $1 billion a year.

    Thirty years ago, the federal Disaster Financial Assistance Arrangements program, which compensates flood victims, paid out about $50 million a year. The Parliamentary Budget Officer estimates that this number will reach $900 million a year for the next five years. And 75% of that is expected to be caused by floods alone.
    As insurers and emergency managers, we have a vested interest in reversing these trends.

    We all have a role to play

    IBC advocates for a “whole-of-society approach” to addressing flood risk. This is a coordinated public and private effort where governments, insurers and homeowners collaborate to address the risks associated with flooding before a flood occurs.

    The insurance industry has already started taking steps to mitigate flood risks for customers. Insurers are now offering new home insurance policies that cover flood and sewer backups to help alleviate financial risks. They are also investing millions in gathering data, producing new flood models and creating ways to warn clients about weather and flooding risks so they can take proactive, preventive action to prepare for severe weather events.

    Having just attended the Understanding Risk conference in Victoria (thanks to our first moderator Jessica), its clear that we need a better understanding of the risks we face in the province. With regard to flood, first and foremost this means we need to update our flood maps, and make them readily available for everyone to see.

    Once we have the data, we need to better manage the risks of flooding by setting more stringent land-use planning policies that keep citizens and business out of harm’s way. That also means tightening building codes, providing incentives for builders to avoid other areas that are prone to flooding (insurance can help create a price incentive here), investing in infrastructure and sewer improvements, and making wetland preservation and restoration a priority.

    We must also help raise citizens’ awareness about managing their individual flood risk. In general, people are largely unaware of the increasing danger presented by floods. A recent poll by Partners for Action revealed that only 6% of Canadians who live in designated flood risk areas are aware of their risk. Clearly, we have a lot of work to do to better educate the public about the risk they face.

    I’d like hear your opinion on what we can do to educate British Columbians to better manage this issue, and the role you think Canada’s insurers can play as part of the solution to increase our understanding and resiliency to flood risk.

    Cheers,
    Aaron

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    #1282

    Hi Aaron,
    Thanks for posting information about flood risks and some of the ways insurers may be able to assist in pushing us forward to mitigating flood risks.
    Some ideas for educating people about flood risk could be:
    1. Including all known risks in public mapping.
    2. Requiring real estate websites and agents to disclose all known risks in their publications.
    3. Requiring all new homeowners to sign a document that outlines potential hazards and clearly states that if they choose to buy a property, they are responsible for mitigating the potential risks to a reasonable level with insurance/financial incentives for compliance (to be determined).
    4. Providing incentives for areas of high risk for flooding to be purchased back and turned into wetlands that can handle the flooding and meandering of creeks and rivers.
    5. Turning 50 to 100 metres of land on either side of any larger waterways into provincially owned lands for public enjoyment without private ownership.

    I realize that these all sound fairly prescriptive and it would be great if we could just gently tell everyone of the risks and hope that things change but we’ve tried that and it doesn’t really seem to be working.
    Looking forward to hearing other members ideas!

    #1283

    Aaron Sutherland
    Participant

    Thanks Sybille,

    Completely agree that part of the solution will include improved consumer education, increased use of natural barriers, and likely (unfortunately) managed retreat over the long term.

    Insurers are increasingly investing in flood maps to create new flood insurance products. Unfortunately, they are reluctant to release these publicly as they have invested significant resources into their creation, and would be competitively disadvantaged with other insurers if they made them public.

    IBC has created our own flood maps and interactive flood mapping tool, and will be demonstrating this at events across the provinces this summer (look for us at Vancouver’s EP Week event May 11). We displayed the maps at the Globe Conference in Vancouver, and at the UR conference in Victoria. While lacking the detail needed for land-use planning, IBC’s maps could illustrate to homeowners a high-level illustration of the risks they face. Such a concept could (should?) be incorporated into real estate websites to illustrate flood risk to prospective buyers, in a similar way that “walk scores” are now included as well.

    Would love to hear what others think!

    #1291

    Pete Smillie
    Participant

    Hi Aaron, I’d like to offer a few questions based on some information and themes I’ve heard at conferences in the past year, and also would like to use this opportunity to continue to build and evolve this forum as professional development opportunity and resource for BCAEM members.

    Insurance in the EOC – Can you comment on how prevalent it is becoming for insurance agency reps. to be present in EOCs, and if there are best practices that people can build into their organizational EOC SOPs to help guide when, how, who, and for what purposes to incorporate insurance into the EOC. Has the industry contacted ICS Canada or other training organizations to explore developing this function in their training and resources?

    Role of the BCAEM – Do you have any thoughts on the role the BCAEM as a professional association with a role in information sharing, advocacy, networking and connecting organizations, and EM professional development, could play specifically related to facilitating the incorporation insurance considerations into EM planning with public or private organizations? Or more broadly in flood management?

    Flood Risk Game Changers – Do you see any game changers coming to change the flood risk management situation, or do you expect it will be an iterative process as the numerous stakeholders work together to build up the fundamentals needed to support long term risk reduction? From your perspective were there significant items that came from the national flood risk roundtable last year? Is there a change the insurance industry could collaboratively develop flood maps to accelerate the process, or will this remain proprietary in nature?

    Thanks for any comments you have, and thanks for your time this week!

    #1292

    Aaron Sutherland
    Participant

    Thanks Pete,
    Lots to unpack in your comments!

    On the first – IBC joined the recovery group in the Provincial EOC in Victoria following the wildfires last summer. Following disaster, IBC and many of Canada’s insurers mobilize to provide on-the-ground support to individuals in need. In the case of last years wildfires, this had us in Kamloops, Prince George, and Williams Lake. Our presence in communities where individuals are evacuated to allows us to help alleviate some of the anxiety and stress individuals face when under evacuation (by being there to answer questions or put them in touch with their insurer, as many otherwise don’t know who their insurer is), and allows insurers to instantly provide much-needed funds for things like hotels, food, and clothing and for which insurance provides. In doing so, it also helps ensure government can focus on supporting those most in need, however, this can only happen if the industry is brought in early on. IBC can help provide “one window in, and one window out” between government and the insurance industry, and is happy to support regional EOCs however we can.

    As insurers continue to take a larger role as “second responders” – though the development of new protections for risks like flooding – the more closely we can tie the industry and the emergency management community together, the better. This could also help foster improved resiliency overall, and a faster and more fulsome recovery should disaster strike. IBC and the BCAEM could play a key role in building those relationships, and helping better inform insurance considerations in EM planning. I would encourage all those reading to never hesitate to reach out should they want to pull us into their processes.

    Finally, I see better public education on flood risk as the real game changer. The more we can publicize the risk facing British Columbians and get them educated, the better we can ensure we are making the right decisions regarding development, land use planning, and resiliency investment. Last year’s roundtable was a good first step and I know the discussions on this file will be continuing at upcoming Federal, Provincial, and Territorial tables. Canada’s insurers can help provide affordable financial protection (Flood Insurance) for roughly 90% of Canadian home owners. How we protect the remainder will require a partnership of some kind (or government could continue to insure all of it through DFAA).

    Unfortunately, I believe insurers will likely continue to hesitate to release their flood maps for the foreseeable future. However, they do purchase these from large risk-modeling firms who may be eager to expand their customer base to governments at all levels. Insurer maps also are unlikely to provide the level of information needed by emergency managers, but there could be an opportunity for government to engage with the same risk modeling firms to develop and secure flood maps of their own, potentially for less than it would cost to create these on their own. The insurance industry can help facilitate those discussions, and try to support a solution there also.

    Thanks!

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