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THE ROLE OF INSURANCE FOR FLOOD RISK REDUCTION IN LONDON: AN AGENT BASED MODEL
APPROACH
Katie Jenkins, Jim Hall, Jan Dubbelboer – ECI, Oxford Swenja Surminski, Florence Crick - LSE
Igor Nikolic - TU Delft
London case study
• London has a relatively low standard of protection against
surface water flooding.
• Considered to be the most likely cause of flood events,
and probably the greatest short-term climate risk for
Greater London.
• Cost to England of £1.3bn - £2.2bn per year.
• Need for effective and economic options to deal with
present and future levels of surface water flood risk
• Public-private partnership between the UK government
and the insurance industry, known as the ‘Statement of
Principles’
• Need for continued, but redefined, public-private
partnership resulted in proposed Flood Re Scheme
Surface water flooding in the Borough of Camden, 2002
An agent based approach
• Useful for understanding systems and their behaviour, and visualising effects of
changing behaviour.
• Designed to address multiple research questions
• Developed around GIS data and incorporates probabilistic time series data on
surface water flood events
Example of
part of the user
interface and
visualisation
for London
Borough of
Camden
Simplified model overview
The ABM characterises different agents (people, insurer, government, developer, and Bank)
who interact within the environment.
Results: Affordability
The effect of Flood Re (dashed line) on the
average flood insurance premium over time
The effect of Flood Re (dashed line) on the
number of foreclosures of houses in flood risk
over time
Results: Flood Re design
The effect of including post-2009 homes in
Flood Re on the average flood insurance
premium
The effect of including post-2009 homes in
Flood Re on the % of flood risk homes in Flood
Re
Results: Flood protection measures
The effect of Flood Re and flood protection measures on
average flood risk over time
The effect of flood protection measures on the
percentage of houses re-insured into Flood Re over time
Summary
• Patterns of behaviour shown by the ABM are in line with literature, real world
data, and expert opinions
• Highlights potential benefits of flood protection measures in the form of reduced
damages and flood risk
• Demonstrates the potential role of the Flood Re scheme to make insurance
affordable
• Investigating how extensions and modifications to the proposed Flood Re
scheme could facilitate risk reduction, and the design - including options for the
transition to risk based pricing
• Investigating the additional role of government and developers in actively
incentivising risk reduction
http://www.enhanceproject.eu/