If "Climate resilience must be part of every government’s agenda" per Intact Financial and Sun Life, What is Insurance Industry's Role?

A Globe and Mail opinion piece from the insurance industry does some finger pointing on resilience, but should look in the mirror and consider its role in a public-private partnership. It is right to have resilience on every government's agenda - it is - how can the insurance industry participate and support the move toward greater resilience? Besides in writing opinions pieces from its echo chamber and foisting impractical research on governments who are trying to get things done? My response below.


These insurance executives need some new advisers, preferably from the engineering community and should realize that just as fire insurance has evolved so will flood insurance. And certainly flood resiliency is important and communities must protect critical infrastructure, but the opinion piece is just that – grossly uninformed sound bite opinions gathered and amplified in an echo chamber of the insurance industry’s own making. Someone open the door and let in some fresh air for clearer thoughts.

What is with the focus on climate change causing extreme weather events and impacts? All good engineers know that flood damages are caused by historical design standards in old communities (old small sewer pipes never designed to handle big storms at all) and historical high-risk land use decisions (long term leases to Toronto Island cottagers and commuter rail lines through the bottom of the Don River Flood Plain) ... hazards that have been in place for over a century. And despite what the insurance industry has been saying (storms are more frequent or severe due to climate change), official Engineering Climate Datasets say the opposite in regions like southern Ontario. And it has been uncovered that widely-touted “Insurance Facts” like weather events that happened every 40 years is no happening every 6 year, has been shown to be absolutely ‘made up’ by those in the engineering community who rely on data to design resilient communities. So hazards are long standing, damages may be increasing because the insurance industry is growing just like urban areas are, increasing exposure to the same ‘old normals’ we have always contended with. The ‘new normal’ is an insurance industry-affiliated research organization categorically misinforming the public on the causes and often appropriate solutions to mitigate flooding.

Saying “our industry can help find solutions” – oh, really? The engineering community begs to differ. Why does the insurance industry’s research organization promote wetlands as a solution to urban flooding, cherry-picking atypical watersheds covered with wetlands as their case studies, and prescribe them as an absolutely impractical solution to tackling today’s infrastructure capacity constraints across the country? Why does it promote green infrastructure like permeable pavement on driveways to soak rain into the ground while at the same time promoting sealing of cracks in driveways to keep it out of the ground. Conflicted? Confused? Absolutely. Never mind that permeable pavement has such as high maintenance cost it has a payback period of over 300 years if you install it. This is not helpful.

The insurance industry is so panicked, maybe because it is being misinformed on all the facts, and as KPMG recently noted did not do a good job of pricing flood insurance at all, that it is throwing everything at the wall to see what will stick as solutions. Bioswales? Aka soggy green ditches on every front yard to store runoff from the road – those are being promoted by the insurance industry from Senate committee presentations to TVO spotlights. While the insurance industry recommends these green infrastructure measures, economic analysis shows they pay back pennies in flood reduction benefits for every dollar invested in capital construction and ongoing maintenance. Are those the keen financial investments the insurance industry wants communities to make, and taxpayers to pay for? Please – if these are your practical solutions for cities STOP right now. You’re sinking them and diverting attention from solutions that can make a difference.

The insurance industry needs an “A-Team” to give them fact on what is causing flooding and the priorities for addressing it, and where they can help. Get out of the echo chamber. Insurance industry research agencies can do more harm than good in mis-identifying problems and prescribing the least technically and cost effective solutions.

Here’s an idea – all cities have to complete asset management plans to get federal gas tax funding. Why don’t insurance companies share a bit of their data, and help cities set infrastructure upgrade priorities instead of just saying there is a crisis in the papers? That’s right, be active in this ‘public-private partnership’ you write about– tell the folks down the hall to find a few big cities that you insure and go reach out and share some risk data with them so they can refine their infrastructure investment priorities. This ain’t rocket surgery. Work with city engineers on the resiliency aspect of their asset plans – insurance folks, you have risk mapping at the postal code level of details that many small municipalities do not have – some small cities don’t even have digital mapping of assets at all. Support them. Create a 'capacity-building' program to do this through FCM ... I'd volunteer for that.

In 28 years of practice I have never seen an insurance industry representative at a community meeting about local flooding and I’ve been to many. To make a public-private partnership that has to change. How? Create an insurance industry group that actively participates in the current problem solving process – maybe you will have to herd cats among all the companies to make this happen, but it will be worth the effort. In Ontario we call this the Class Environmental Assessment process, and this is how we have been defining and solving flooding and other infrastructure problems for over 30 years. Insurance industry, come on out to our meetings. Join our project stakeholder committees. Don’t just wait for big flood with in Peterborough or Windsor to show up and declare a crisis. Make it part of someone’s day job. Participate. Share. Help.

You may not know this but this type of data sharing partnership has already happened in some advanced cities where the insurance industry and cities are working together on solutions. We need to support this ground-level public-private collaboration as opposed to having insurance-industry research organizations proposing out-of-touch, impractical and costly ‘solutions’ upon cities – that will only keep us in a holding pattern and prevent us from moving ahead on effective resiliency strategies. Please stop with promoting the bioswales, permeable pavement and wetlands! As pretty as this stuff looks in the artist renderings, it would be a green blob menace to government finances and we just don't have wetland-flood-remediation opportunities in most urban areas.

So please get some fresh air. Get in touch with the local engineers and participate in finding practical solutions in all communities, at the ground level. Opinion pieces do not really solve anything, nor cherry-picked, headline-grabbing research – governments can achieve extreme weather resilience with your active participation.

Robert J. Muir, P.Eng.