1. Adaptation to Climate Change Robert Tremblay Director, Research Insurance Bureau of Canada RIMS Conference September 14, 2009 – St-John’s Newfoundland.&Labrador

2. Insurance industry in Canada Over 200 Companies $20 billion in claims paid Players: –Primary insurers (domestic) –Re-insurers (domestic & international)

3. What Canadian insurers covers… Homes –Fire, theft, vandalism, wind damage, –Sewer back-ups Businesses –Business interruption –Production means and premises –Floods Liability Insurance –Municipal –Professional, commercial

4. Climate Change: Industry’s Challenge Why? More severe weather more frequently Mid-to-long term issues of availability and affordability of insurance

5. Background: Largest insurance disasters Source: ICLR

6. Canada’s costliest disasters Event and yearInfrastructure FailureInsured Loss Saguenay floods (1996)Dams$1.5 billion Ice Storm (1998)Electric grid$1.6 billion B.C. Wild Fires (2003)n/a$200 million Peterborough floods (2004)Sewer/surface water systems $90 million Toronto rains (2005)Sewer/surface water systems $500 million

7. Contributing factor to water losses Municipal infrastructure performance failures More basements are finished Value of contents much higher than before High density of dwellings

8. Water losses more important than fire At least $1.5 billion/year in claims Water losses 2 sources: –Mechanical breaks in home/building equipment –Municipal infrastructure failures

9. Insurance catalyst for adaptation? Important to price risk properly Which can be the trigger for infrastructure and adaptation behavior

10. Adaptation: Help municipalities Develop prospective Municipal Risk Assessment Tool –Key indicators of likelihood of infrastructure failure –Risk analysis of each indicator –Future climatic models to determine how much rain, where, and when

11. Risk Assessment Tool Builds on work done by PIEVC Top down vs. bottom-up System design vs. actual capacity Integrates Operational Best Practices Designed as a quick diagnosis not a prescriptive solution

12. Need for dialogue Too late to bury head in sand Preaching to the choir… Assessment tool brings the need to discuss: –Performance standards (service levels) –“Acceptable risk” –Need to broaden stakeholders

13. Need Tools Updated IDF curves Downscaled climatic maps Still not an excuse for inaction, need for interim engineering guidance

14. Other complementary approaches True pricing of potable/waste water services Building codes Adapting dwellings (back flow valves) Reduce water run-offs –Rain barrels –Permeable driveways –Low impact urban development

15. Conclusion In conclusion Moral duty to ensure Canadians protected Mitigate damage through adaptation measures  Communities more resilient Sense of urgency