Community Insurability Planning

The IFLA AFRICA (Landscape architecture) Climate Change Working Group hosted a webinar titled: Community insurability planning. Our presenters, Erman Eruz (HR&A) and Steve Brandt (InnSure) shared their thoughts on the role of insurance in building a resilience dividend, and demonstrated the tool that they are developing that evaluates the Total Cost of Risk (TCOR).

In summary, the increasing frequency and scale of climate shocks is affecting the insurability of public and private infrastructure. This increased risk is creating a ‘gap’ in what is insured, and what isn’t. Practically, this is creating situations where insurance is no longer available or is very expensive.

For example, the wildfires that have ravaged parts of California in recent years have increased in frequency and impact. Insurance premiums have increased in response and in some high-risk cases, it has been withdrawn, making homeowners entirely responsible for rebuilding fire-damaged homes. The ripple effect is that higher insurance premiums will be capitalized into house prices, lowering their values, and thereby affecting savings and investment strategies.

African cities also experience similar climate-related shocks that affect insurability. Climate adaptation interventions are all about managing risk, whether to wildfires, flooding, sea level rise or heat, which makes them all about insurance. And insurance is all about managing risk. But why should landscape architects be interested in insurance? Or insurance gaps?

Simply, because climate adaptation interventions close the insurance gap by reducing risk, often by using nature-based solutions. And who design and build nature-based solutions? Us. Landscape architects.

As Erman, an architect working at HR&A who specialises in economic development put it;

”risk mitigation is done through climate adaptation and investment, and this will be very familiar to this group of landscape architects, because climate adaptation investments can include nature-based interventions and infrastructure that landscape architects play an important role in designing. And these interventions reduce the risk that a community is exposed to.”

We all agree that because of climate change, business as usual is no longer possible. Both presenters propose that insurability planning should be part of evaluating project options and that insurance should be thought of as infrastructure. Approached in this way, insurance planning becomes something that we – governments, communities or technicians – can do proactively.

The HR&A and InnSure teams have developed a cost benefit analysis simulator that enables insurability planning. It firstly determines the climate adaptation value of a planned infrastructure investment, secondly the impact on the insurance landscape – and lastly, the crucial resilience dividend. In this way, it provides game-changing information that empowers those engaged in decision-making processes.

How do landscape architects potentially use the tool?

The tool can be used at an early stage to assess different options for a project such as helping to evaluate the climate impact of a sea wall or a public open space. It follows that with ever-shrinking budgets and expanding needs, tools that help decision-makers reach sensible decisions around investment can play a pivotal role in delivering resilience.

Why should landscape architects be excited by the TCOR tool?

Because it provides landscape architects with a tool that can develop a financial argument for climate adaptation work, in way that has not been available – until now. Making a financial argument is becoming the only way to land ideas and effect climate change action.

At present, the tool is being improved and developed through application in American towns and cities. How it will respond to African cities with high levels of informality and low levels of insurance, is a question we are hoping will be answered soon.

If you missed the webinar, you can watch the recording here: IFLA Africa Webinar Climate Adaptation Investment community based climate insurability planning – YouTube

If you’re interested in viewing a simulation of the TCOR tool, you can fast forward to ±28.0 minutes and be sure to catch the case studies and discussion thereafter.