A result of urban growth is the expansion of grey infrastructure such as roads, parking lots, and rooftops. These impervious surfaces increase the amount of runoff generated after rainfall and thus raise the risk of flood in cities. The trend is particularly concerning, as, for instance, in Canada around 82% of the total population live in large and mid-sized cities (census 2016 data). It is not surprising therefore that the July 2013 flood in Toronto caused around $950 million in insured damage.

To counter the aforementioned side-effect of urbanization, there is a global movement to replace the grey infrastructure with green infrastructure, such as green roofs and rain gardens. The objective is to increase the permeability in urban areas, which will reduce the amount of runoff generated after rain events. This will reduce the risk of flood and also provide numerous other direct and indirect benefits such as improved air and water quality; ecosystem habitat improvement; an increase in recreational areas (e.g. parks) that contribute to improved health; more energy efficient buildings; and an increase in property values. Additionally, green infrastructure can be easily retrofitted into dense urban areas, where traditional infrastructure improvements may be too cost prohibitive or logistically not possible.

How efficient is the green infrastructure for mitigating the risk of urban flood? Can we leverage the benefits to offset the involved costs? What are the advantages for a participating insurer? These are some of the questions and ideas that will be highlighted in this talk.