Canada’s flood hazard mapping initiative to have broad implications for insurance

Canada’s flood hazard mapping initiative to have broad implications for insurance | Insurance Business Canada

Catastrophe & Flood

Canada’s flood hazard mapping initiative to have broad implications for insurance

Two firms have been tapped for the project

Catastrophe & Flood

By
Gia Snape

Canadians continue to face the increasingly devastating impacts of flooding, with recent events across several provinces underscoring the urgent need for a unified approach to flood risk management.

As the country continues to grapple with the growing threat of flooding, the need for accurate, reliable, and comprehensive flood risk data has never been greater.

In response to this issue, Swiss Re data and technology firm Fathom and Aon Impact Forecasting have teamed up under a new initiative commissioned by Public Safety Canada. The two organizations are working to create a comprehensive, nationwide flood hazard map to provide consistent, large-scale flood risk data.

Gavin Lewis (pictured left), head of engineering at Fathom, spoke to Insurance Business about the genesis of the initiative and the importance of public-private collaboration to address flood risk.

The collaboration between Fathom and Aon is not new. Both companies have previously worked together on similar projects in the US and globally, which allowed them to leverage their shared experience to fast-track the development of this critical dataset.

“We felt that the sum of the parts was much greater working with Aon, who had datasets in certain areas that augmented or improved some of the data that we had,” said Lewis. “Because of the track record we had with Aon working on other projects, we were able to fast-track the development of the dataset under the tender.”

Towards a ‘unified’ flood risk map for Canada

One of the key challenges this project aims to address is the inconsistent and often outdated flood risk data that currently exists across Canada. Lewis said: “Part of the issue is that there are a lot of datasets in Canada. Some of them are very old, while a lot of Canada is not mapped at all for flooding.”

This inconsistency has made it difficult for decision-makers to have a comprehensive understanding of the flood hazards facing Canada, limiting their ability to make informed decisions regarding flood prevention and mitigation.

The new initiative is significant not only for its ambition to provide a unified flood risk map for Canada but also for its potential impact on the insurance industry.

Swiss Re, a knowledge partner in this project, sees great value in the endeavor. “It’s an honour for us that Public Safety Canada has chosen our product,” said Dipiki Deol (pictured right), senior client manager, public sector solutions at Swiss Re.

She highlighted the critical role that accurate flood hazard data plays in the insurance industry, noting that floods do not respect human-made borders between provinces or territories. “The flooding issues that we’re seeing, whether it’s in Alberta, Ontario, Quebec, or the Maritimes, don’t follow that human delineation,” Deol said.

With updated and unified flood risk data, companies like Swiss Re can better understand and price the risk, ultimately benefiting Canadian citizens by providing more accurate and fair insurance coverage.

Flood risk mapping – what are the challenges?

However, the project is not without its challenges. One of the major hurdles is the need to account for the impacts of climate change on flood risk.

“One of the key things is that we’re under a non-stationary climate, so we are providing a view of flooding today, but also we have to provide a view of flooding under future climate scenarios,” said Lewis. He explained that this adds a layer of complexity to the modelling process, as historical records of flooding events are no longer reliable indicators of future risk.

The team must consider a variety of emission scenarios, from mild to extreme, to provide a comprehensive picture of potential future flood hazards.

“It’s really important that decision-makers have a joined-up view because flooding is very spatially dependent. It’s very localized, but it can cover very big areas,” Lewis added.

Another challenge is the need to differentiate between various types of flooding, such as river flooding, flash flooding, and coastal flooding. Each type of flooding behaves differently and requires a tailored approach to modelling and risk assessment.

“[Different types of flooding] can behave in very different ways, both today and in future climate scenarios,” said Gavin.

The team also needs to account for factors like sea-level rise, which is expected to have a significant impact on coastal communities across Canada.

While the project’s immediate focus is on creating a comprehensive flood hazard map, the long-term goal is to build resilience and reduce the vulnerability of Canadian communities to flooding, while raising awareness of the potential impacts of flooding is also a critical component of the initiative.

“What we’re providing with the dataset is an evidence base [so that] more informed decisions can be made more robustly,” Lewis said.

The project is also expected to have broader implications beyond just flood prevention and response. Deol noted that having a unified, up-to-date view of flood risk can influence a range of decisions at both the micro and macro levels. She suggested that the data could be valuable for a wide range of stakeholders, from policymakers to infrastructure planners.

Insurance Business Canada also reached out to Aon Impact Forecasting for comment but had not received a response as of the publication time.

In a Press release, Adam Podlaha, global head of Aon’s Impact Forecasting, said: “Aon is excited to have been able to help drive this initiative through the provision of our extensive high-resolution inland flood data and expertise in flood peril, and in so doing support the development of a national flood risk assessment in Canada.”

What are your thoughts on the flood risk mapping initiative? Please share a comment below.

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