Insurance company Intact Financial Corp. will collaborate with the University of Waterloo (UW) in Canada to mitigate the risks of climate change by creating the Intact Center on Climate Adaptation (ICCA). The ICCA's chief goal is to be an incubator for new measures to adapt to climate change.
Intact Financial Corp. will allocate $4.25 million to support the ICCA. The center will focus on awareness and research regarding innovative solutions to climate change risks that Canadian communities face, and will be based at the university's Faculty of Environment.
"The impacts of climate change are certainly being felt by the insurance sector, and indeed they're on the front line, if you will, of having to deal with the negative impacts associated with climate change," said Professor Blair Feltmate, ICCA head at the University of Waterloo.
The company reported that insurance payouts have increased significantly in the past few years, and much of that can be attributed to storms caused by climate change.
Feltmate said claims have gone up by $1 billion each year for the last five or six years, and that total payouts increased from $100 million and $500 million annually to over $1 billion. She said that people are searching for ways to de-risk the system going forward through climate change adaptation in order to reduce the impacts of flooding and other factors.
"People think that adaptation to climate change is always very expensive, and it doesn't have to be," added Feltmate.
One of the ICCA's initiatives is to start a green infrastructure program that aims to protect communities from severe precipitation. The ICCA will also create a program that will study the vulnerabilities to extreme weather that various industries experience.
Additionally, a national home adaptation audit program designed to evaluate how homes can be vulnerable to flood damage will be launched under the ICCA.
The Insurance Bureau of Canada (IBC) said property damage caused by extreme weather is the chief source of property insurance claims, which now exceeds payouts from fire damage.
Flooding has been the largest source of claims in recent years. The IBC said that extreme weather payouts are doubling every five to 10 years, with a record of $3.4 billion in 2013 because of severe flooding in Toronto and Alberta.
Many insurers were prompted to increase premiums by 20 percent to deal with the costs of property damage caused by extreme weather, the IBC said.
Meanwhile, Intact and UW previously teamed up for The Climate Adaptation Project in which they identified the areas in Canada that are most vulnerable to climate change. The ICCA is part of a five-year partnership between the company and the university.
Photo : Wilson Hui | Flickr