Sunny Days Ahead

“Rain, rain, go away/Come again another day.” This childhood mantra could well be what insurers are singing when they look to the skies these days.

Far from going away, however, the rain keeps pouring down with greater frequency and force. Speak with anyone in the insurance industry these days and you’ll likely find yourself in a conversation about some recent severe weather event, and the amount of insurable damage it caused. Often, and especially at this time of year, severe storms bring with them lots of rain. This in turn translates into sewer backup claims for both personal lines and commercial writers.

Insurers aren’t the only ones worrying about this problem. The water damage story reaches into every community. Rainstorms, melting snow, overflowing rivers and increased precipitation are all growing concerns for consumers and governments. The issue of water has, if you will pardon the expression, reached its boiling point.

I wrote about this water problem in the December 2009 issue of Canadian Underwriter. Insurance Bureau of Canada (IBC) was adamant then — and remains so today — that this problem can be solved; that we can adapt our practices to minimize losses. One such adaptation tool is the development of a risk assessment scoring mechanism that will help communities pinpoint vulnerabilities in their water and sewer system infrastructure. This ground-breaking tool will also provide unprecedented data for the industry to help insurers better understand and underwrite the types of risks they face.

The project is progressing well. In fact, we are currently collecting data in Hamilton, Fredericton and Winnipeg. But in the meantime, many communities across the country have taken it upon themselves to do something about keeping their basements dry.

Some of the work is so impressive that IBC recently recognized these communities, bestowing them with what we call the Watershed Awards. IBC introduced the Watershed Awards in partnership with the Federation of Canadian Municipalities (FCM) in 2010. The entries received from communities across the country have been remarkable.

These municipalities are trailblazers when it comes to reducing infrastructure vulnerabilities. They should be considered leaders in adaptation to climate change. IBC is holding them up as fine examples of what can be done at the local level to reduce the risk of damage caused by severe weather.

As the industry’s work on adaptation to climate change continues, we hope to encourage other municipalities across the country to implement innovative techniques of their own to reduce the risks associated with having too much water and no place for it to go.

The inaugural year of the Watershed Awards was quite successful. IBC hoped to receive at least 10 submissions, and entries trickled in over the first few weeks. Imagine our delight when, three minutes before the deadline, our inbox was inundated with submissions, bringing the total to 35.The vast majority of the submissions would have been worthy recipients of the award, but a few in particular stood out.

For example, Saskatoon invested in “superpipes.” Foundation drainage systems that drain directly into basement floor drains — known as household weeping tile systems — were causing significant flooding from sanitary sewer systems after severe rainfalls. Now when a large rainfall occurs, the extra flow generated by the weeping tile systems overflows directly into the superpipes instead of into the basements.

The Newfoundland and Labrador towns of Appleton and Glenwood adopted a back-to-nature approach that uses vegetation to purify wastewater. It has the benefit of significantly increasing the storage capacity, reducing the risk of sewer backups.

Quebec’s regional winner, Ville de Saint-Jrme, uses drainage basins to catch stormwater instead of allowing surface runoff to enter storm sewers immediately. The project illustrates how an infrastructure project can be multi-functional, offering utilitarian, ecological and recreational benefits.

Then there’s Central Saanich in British Columbia. It came up with an ecofriendly, integrated stormwater management plan tailored to the area’s unique needs. Members of government agencies, area farmers, representatives from local interest groups and district staff worked together to develop proactive solutions to deal with the changes to the district’s stormwater system and natural habitat brought about by urbanization.

Ontario featured co-winners. Toronto was recognized for adopting an ambitious, integrated system approach for preventing basement flooding, while Richmond Hill’s work on updating its flood control facility and implementing a multi-faceted stormwater management project was also worthy of an award.

Finally, Edmonton, winner of the national Watershed Award, demonstrated ingenuity in creating a very cost-effective flood control system that doubles as a school playing field in normal circumstances. This innovative solution uses a school playing field to provide stormwater management and flood control when there is extreme rainfall. It is one of a number of projects implemented by the city in response to an extreme rainfall event in 2004 that flooded more than 4,000 basements throughout the city, resulting in $171 million in insurance claims.

It’s difficult to bring these projects to life in writing, so IBC has produced videos to showcase each of the inventive solutions I’ve described. They are available on YouTube or on IBC’s website at www.ibc.ca.

So why do all these improvements matter to insurers and their customers? Insurers see first-hand the havoc that severe weather is having on individuals and communities. As primary bearers of the risk associated with increasingly severe weather, insurers know effective adaptation strategies are vital to protecting homeowners and businesses. The investments made by these communities to improve their infrastructure and introduce other mechanisms to contain water will help minimize the number of largely preventable claims insurers will have to pay after severe weather hits in these municipalities. And, policyholders will suffer less damage to their properties and belongings.

This is why IBC will continue to encourage this type of innovation as we work to help communities adapt to climate change. Our efforts will include advocating for better municipal infrastructure and creating innovative programs and partnerships that promote the creation of more sustainable communities.

Our industry’s long-term goals with respect to adaptation to climate change are clear: communities must be ready to withstand the impacts of climate change; all levels of government must contribute to making the necessary changes to bolster preparation; and individual citizens must recognize how they, too, can play a role in adaptation and how they can make a difference through how and where they live.

Canada’s property and casualty insurance industry has not jumped on the climate change bandwagon simply to reap the benefits of communicating its corporate social responsibility. Our industry has championed action on adaptation to climate change because, if it doesn’t, it has something very tangible to lose.

Wishing for the rain to go away won’t solve the problem. Introducing adaptive measures however, will help us all adjust to our new climate reality with more grace.

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Municipalities are trailblazers when it comes to reducing infrastructure vulnerabilities. IBC is holding them up as fine examples of what can be done at the local level to reduce the risk of damage caused by severe weather.