This event convened financial sector leaders and climate risk experts to discuss the escalating challenges that our changing climate presents for the sector. The program included three segments.

• Incentivizing Homeowners to Reduce Flood Risks 
• Cross-Sector Panel Discussion
• Fireside Chat with Insurance Bureau of Canada’s (IBC’s) Celyeste Power

Incentivizing Homeowners to Reduce Flood Risks
Mathieu Boudreault, a professor at Université du Québec à Montréal (UQAM), unveiled his GRI-funded report on strategies aimed at Incentivizing Flood Risk Reduction for Homeowners. Mathieu underscored the significant concentration of flood risks in vulnerable areas where flood insurance is either unavailable or prohibitively expensive, and stressed that any successful strategy requires the involvement of insurers, mortgage providers, and all three levels of government.

Key findings of the report:

• Relocation could be an effective risk reduction tool, but requires thoughtful compensation for homeowners that considers their cognitive biases.
• Multiyear insurance policies could also deliver stable, predictable premiums, risk reduction, and better underwriting practices.

Mathieu noted that Canada tends to focus on climate change mitigation efforts, and said that more focus should be placed on climate adaptation.

Cross-Sector Panel Discussion
The panel featured senior leaders from Desjardins, Intact Insurance and RBC, who collectively emphasized the increasing importance of physical climate risk management across all segments of the financial sector.

Key points:

• Desjardins – The expanding universe of risks and the influence of climate change on credit risk necessitate more robust modeling and borrower education.
• Intact – Focused on adapting to primary risks like flooding and extreme weather, investing heavily in data acquisition and community resilience.
• RBC – Proactive approach to stress testing and integrating physical risk into decision-making, advocating for continuous data validation and client education on climate impacts.

Fireside Chat
Sonia Baxendale spoke to Celyeste Power about IBC’s leadership role in climate adaptation. Celyeste stressed the importance of educating not only the public, but also government and industry, on the true impacts of climate change. She emphasized initiatives like Climate Proof Canada to strengthen climate adaptation and address gaps in flood insurance coverage. She also advocated for inter-governmental cooperation on earthquake insurance and emphasized the need for regulatory frameworks catering to various financial institutions’ unique risk profiles.

The conversation underscored the critical importance of collaboration and accessible data in implementing effective strategies for managing physical climate risks.