Climate-sensitive risk modelling for water damage in buildings

Water damage to buildings caused by rainfall is an increasing challenge for the insurance industry, now costing more than flood damage covered by the Natural Damage Compensation Act. To address this challenge, we have developed a statistical risk model that assesses water damage risk of individual buildings across Norway. By integrating historical insurance data, climate projections and topographic indices, our model provides essential insights to support risk assessment and mitigation.

How does water damage occur in buildings?

Several factors determine how vulnerable a building is to water damage. First and foremost, the level of risk can be determined by building characteristics such as whether the structure has a basement. However, other factors such as the shape of surrounding terrain and local climatic conditions also pose a significant risk. Damages typically occur when rainwater infiltrates the building exterior or from backflow in the drainage system.

Leveraging insurance data for climate risk modelling

In Norway, Gjensidige has been a driving force and pioneer in climate-related insurance risk, and NR’s collaboration with Gjensidige dates back to 2000. By combining their historical insurance data with climate projections and topographic indices, we have successfully developed a risk model that provides essential decision support for both the insurance industry and for policymakers.

Modelling future risks under climate change

NR’s risk model estimates changes in the expected number of damages over three decades up to 2100, compared to today. The predictions are based on RCP4.5 and RCP8.5 emission scenarios, and offer insights into the uncertainties surrounding climate projections.

The model breaks down total risk into various factors, enabling a detailed understanding of vulnerabilities in a specific location. With climate change increasing the frequency and intensity of extreme weather events, this helps insurance companies and authorities to take targeted, preventative action in areas that are more at risk.

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