1. April 7, 2016 Risk Management in the Context of Climate Change Laval University April 7, 2016 Dr. Blair Feltmate Head, Intact Centre on Climate Adaptation University of Waterloo bfeltmat@uwaterloo.ca Climate Change and Extreme Weather Events in Canada: Not Adapting is NOT an Option http://www.intactcentreclimateadaptation.ca/

2. AGENDA 2 1.Climate change and extreme weather – the challenge is evolving 2.Costs of extreme weather to the P&C sector 3.Home Adaptation Assessment Program 4.Conclusion

3. 3 It is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century (0.08 o C/ decade for past 100 years) What Science tells Us About Climate Change

4. World Energy Supply Source: International Energy Agency 4

5. Quebec Floods Eastern Ice Storm Ontario Wind and Rain Alberta and Toronto Floods Canada’s Climate Change Challenge: Catastrophic Insurable Losses Courtesy: Insurance Bureau of Canada 5 5

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7. 7 HOME ADAPTATION ASSESSMENT PROGRAM (HAAP) Home Adaptation Assessment Program  Limits the potential for basement flooding Technical Aspects of Assessment  Assessment time on property = 1.5 - 2.5 hours per house (i.e., one auditor = 2-3 houses per day)  Homeowner encouraged (required) to accompany assessor  Assessment examines about 40 points/categories of reference, both inside and outside house, to limit flood potential – e.g., disconnecting downspouts, contouring to direct water away from foundation, plastic covers over window wells, battery back-up for sump pump, etc.  Assessor Certification – developed by HAAP

8. 8 RECEPTIVITY BY HOME OWNERS FOR HOME ASSESSMENT Calgary/Waterloo/Kitchener – Pilot Studies (400 homes)  63% of audited home owners acted upon audit findings within 6-8 weeks of audit  91% of audited home owners would recommend the audit to others  77% of audited home owners passed audit knowledge to an average of 8 other home owners -- e.g., 100 homes audited equals potential positive impact of 8 x 77 = 616 homes (per 100 homes audited)

9. 9 HAAP ROI Parameters:  Audit = $275/house  Average cost per flooded basement = $20,537/house (IBC, 2014) Sample Calculation (cost of Auditing 1,000 Houses) = 1,000 houses x $275/house = $275,000 Avoided Flood Losses 1,000 Houses (assume 10% of houses otherwise flooded over 10 years without audit): 100 x $20,537/house = $2,053,700 Return Ratio (at 10% flood avoidance) = $275,000 invested/$2,053,700 return = 1:7.5 ROI Worst Case Scenario (assuming low basement flood cost, and low avoidance of basement flooding) – $1 invested yields $7.50 return (over 10 years) Alternate Sample Calculation: auditor visits 500 homes per season – if 5 homes (1%) avoid a basement flood due to auditor’s input, salary of auditor is covered for the year

10. 10 CONCLUSION  Not adapting is not an option  We must avoid “management by disaster” scenarios  The costs of not acting far exceed those of acting  Adaptation applied to infrastructure will only be available for the next few years, and then “fixing” the extreme weather challenge will not be possible