Meta-analysis based predictions of flood insurance and flood vulnerability patterns in Calgary, Alberta

Abstract

Flood risk management requires an understanding of the role that the private insurance system can play in helping to manage future flood risk, and how insurance uptake may vary for different levels of social and physical vulnerability to floods. The objective of this research is to understand the patterns of flood risk, socio-economic characteristics and flood insurance uptake in the City of Calgary, Alberta, Canada, where a recent flood was followed by the introduction of private overland flood insurance. We use a meta-analysis approach to generate a pooled prediction of flood insurance uptake, and compare uptake across socioeconomic factors and flood hazard levels. Our results suggest that highest hazard areas have higher household income, higher average dwelling values and lower levels of home ownership compared to other areas in the city. Hazard levels vary less across measures of immigration status and identification as a visible minority. Predicted insurance coverage varies across the city, with households in high hazard areas most likely to purchase insurance, particularly for a pricing scheme in which low risk households cross-subsidize premiums for high risk households. Our findings provide an important starting point for understanding the role of private flood insurance on the future impacts of flooding in the study area, and may serve as a useful template for understanding the impact of insurance in other new markets.