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In the face of the acceleration of climate change and extreme weather events, the Climate Change Adaptation Project aims to identify actionable and scalable adaptation efforts that can help to reduce risks in Canada.

As a result of being on the front lines of the costly impacts of climate change, the property and casualty (P&C) insurance sector in Canada is leading efforts to help de-risk the country from the growing impacts of wild weather. Before describing some of those efforts, it is important to recap the burden that the industry has faced to date, and to characterize the worsening challenges yet to come.

Up until 2008, the Canadian P&C sector could count on about $200- to 500-million per year in total catastrophic loss claims. However, starting in 2009, things began to change, with total claims exceeding $1-billion per year, every year, up to and including 2014. Topping these escalating costs, most Canadians will recall that 2013 was particularly problematic, with total claims exceeding $3.4-billion, due primarily to floods in Calgary and Toronto. These claims have taken their toll on insurers, as evidenced by the fact that for nine of the past 11 years in Canada, total annual claims payments have exceeded income derived through premiums. Obviously, this situation is not sustainable.


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Dr. Blair Feltmate, Intact Chair, Climate Adaptation, University of Waterloo  SUPPLIED


Given this reality, the question becomes, how do we de-risk Canada relative to extreme weather – and not only the wild weather that we have experienced to date, but also the worsening weather to be experienced going forward. And to be clear, the assuredness of more extreme weather in the future is categorical. Climate science has established, without doubt, that the primary factor driving climate change is the burning of fossil fuels on the planet. According to the International Energy Agency, coal, oil and natural gas currently contribute one-third each to 80 per cent of the world's energy supply – by 2030, this generation mix will not alter; however, the footprint of greenhouse gas emissions will increase by about 20 per cent, due to a global population expanding at a rate of about 90 million people per year.

Recognizing that climate change and extreme weather events are not about to go away, what is Canada to do? The answer can be found, at least in part, through adaptation – that is, deploying means by which risk due to extreme weather can be taken out of the system. This leads us back to the leadership of the property and casualty insurance sector.

Beginning in 2014, and running until 2016, the University of Waterloo, with support from Intact Financial Corporation, launched 20 research studies across Canada, housed under the Climate Change Adaptation Project. The primary purpose of this initiative is to identify actionable and scalable adaptation efforts that can be deployed in Canada with a positive return on investment (ROI). Many of the studies – which include the naturalization of coastal shorelines, replacing impermeable parking lots with permeable surfacing and building naturalized water retention ponds in downtown cores – remain ongoing. However, one study that has been completed, the Home Adaptation Audit Program, has shown tremendous potential to de-risk Canada relative to the growing burden of basement flooding, which has become familiar to too many Canadians.

The Home Adaptation Audit Program consists of a trained assessor reviewing a home, primarily for flood potential, based on about 100 points of evaluation. This audit generally identifies half a dozen recommendations that can be deployed in an afternoon by a homeowner for little to no cost, which can substantially reduce the future risk of basement flooding. Research has shown that upon completion of a home audit, the average homeowner will act upon 70 per cent of the audit recommendations within six to eight weeks of the audit. Typical examples of audit recommendations that can de-risk a property include disconnecting downspouts from weeping tiles, covering window wells with transparent plastic covers and contouring around a house to direct water away from the foundation – this is not advanced physics. For every $1 spent on the Home Adaptation Audit Program, the return on investment relative to avoided flood losses, over a 10-year period, is in the range of $6 to 12. This ROI mirrors the findings of similar research conducted in Australia.

A nationally deployed Home Adaptation Audit Program, along with other adaptation initiatives, can offer practical and cost-effective steps to de-risk Canada from the otherwise growing burden of extreme weather.

Climate science has established, without doubt, that the primary factor driving climate change is the burning of fossil fuels on the planet.


This content was produced by Randall Anthony Communications, in partnership with The Globe and Mail's advertising department. The Globe's editorial department was not involved in its creation.