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2018 DRR Financing 5.8 Margaretta Ayoung

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Developing Climate Resilient Flood and Flash Flood Management Practices to Protect Vulnerable Communities of Georgia - The Role of Risk Modelling in the Development of Flood Insurance Model in Georgia

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2018 DRR Financing 5.8 Margaretta Ayoung

  1. 1. Developing Climate Resilient Flood and Flash Flood Management Practices to Protect Vulnerable Communities of Georgia – The Role of Risk Modelling in the Development of Flood Insurance Model for Georgia Dr. Margaretta Ayoung Presented at: DRR financing regional conference Istanbul, Turkey, 4-5th October 2018
  2. 2. Presentation Outline • Project Overview • Flood Hazard Modelling and Mapping Approach • Flood Socio-economic risk Modelling • Development of Weather Index Insurance Model • Lessons Learned • Next Steps
  3. 3. Project Overview Project Objective “To improve resilience of highly exposed regions of Georgia to hydro-meteorological threats that are increasing in frequency and intensity as a result of climate change.” Risk Knowledge – hazard and risk modelling and mapping Floodplain zoning policy Flood resilient building codes Flood Insurance Scheme Structural interventions CB Adaptation measures Agro-forestry schemes Multi-hazard Risk Assessment Rehabilitated hydrometric network Flood forecasting and EWS Integrated Flood Risk Management Enhancing legislative and policy framework Technology transfer and capacity building FRM intervention measures Enhanced monitoring, forecasting and early warning systems Improved community resilience
  4. 4. Flood Insurance Approach • Hazard Modelling • Flood Mapping • Flood Zoning Stage 1 – Flood Modelling • Risk Score Calculation • Damage and Loss Calculation Stage 2 - Risk Modelling • Risk Based Premium Setting • Index-based pay out principles Stage 3 - Insurance Scheme
  5. 5. Stage 1 - Flood Modelling EUFD Methodology • Directive 2007/60/EC • Assess of risk from flooding, mapping of the flood extent and assets and humans Hydrological Modelling •Detailed rainfall-runoff modelling based on hydrometric data from 1935-Present •Combined with soil, geology, landuse data, topography Hydraulic Modelling •Detailed 1D-2D model - Mike Flood •> 300 river cross-section surveys •10m DEM of floodplain Flood Mapping •2, 5, 10, 20, 50, 100, 100 + CC, 500, 1000 year •Flood zones defined
  6. 6. Flood hazard maps and receptor datasets Receptor data (people, property, Infrastructure, agric etc.) Socio- economic data Flood Risk to People, Agriculture, Infrastructure, etc Socio- economic risk model GIS based socio-economic risk model A bespoke tool developed in ESRI’s ArcGIS Desktop environment encapsulating business logic and utilising spatial analytical functions. Stage 2 - Risk Modelling
  7. 7. Socio-economic Risk Score Damage Flood Risk Property Risk Agricultural Flood Risk Physical Infra- structure Social Rioni River Basin Risk Score
  8. 8. Flood Risk Socio-economics
  9. 9. Stage 3 – Insurance Scheme Weather Index Insurance (WII) - financial instrument to mitigate losses - replace the need for Government/Donor intervention after flood events Weather Index Insurance Equates premiums to risk exposure Compares annual average anticipated losses River gauging to confirm flood levels Works in tandem with new structural measures Flood protection improve lead to lower flood premiums Works in tandem with flood zoning and FFEWS Community co- operation is vital to success
  10. 10. Risk-based premium setting A B Flood Zone Premium Agricultural CategorySize (ha) Property Category Number Affected • Crop type (e.g. Vegetables, Wheat, etc) • Yield • Price • Flood seasonality • Small Residential • Large Residential • Apartment • Commercial • Designated Floodways • Functional Flood plains • High Risk Zone
  11. 11. Pay out Principles Index • River Gauges • Flood zoning 2-5 confirmed • Trigger payout Payment calculation • Property - compensation based on depth of flooding for registered house type • Agricultural yield loss based on flood month for registered crop Payout
  12. 12. • Extensive consultations with private insurance companies, with insurance association, government. • Hesitation/scepticism in the beginning, especially from state agencies, and more interest at a later stage • Despite strong interest from the partner national institutions, piloting of insurance scheme in Rioni basin did not take place during the lifecycle of the UNDP Project WII Consultation and Outcome
  13. 13. • Piloting of the Insurance scheme in Rioni basin did not take place during the lifecycle of the UNDP Project for a number of reasons including: • Political readiness - Insufficient political readiness to ‘push’ it forward. Frequent changes and reforms within the Government are delaying the processes, requiring from UNDP to revisit the topic, and advocate for introduction on a regular basis • Financial – Lack of financial commitment expected from the state (central or municipal) • Technical - Single peril insurance scheme and single geographic focus were potential drawbacks; under-developed insurance culture - low awareness, insufficient understanding and a general mistrust. WII Lessons Learned
  14. 14. Disaster Risk Transfer Mechanisms in Georgia: Challenges and Opportunities Market share per insurance type (%) Government subsidized agri. insurance scheme 0 10 20 30 40 50 60 70 80 90 100 2010 2011 2012 2013 2014 2015 2016 Source: L. Shekasheli, Sh. Jadugishvili, 2017 Insurance Market Research 2010-2016 Health Property Land transport Life Civil liability Other
  15. 15. Disaster Risk Transfer Mechanisms in Georgia: Challenges and Opportunities Natural Hazard Loss Assessment and Recovery System:
  16. 16. • A flood insurance model was developed based on detailed hazard and risk modelling as part of an IFRM framework • Rioni project successfully scaled up – $27 Million GCF funding secured • Nationwide project to address multi-hazards through policy interventions including risk financing, development of a multi-hazard early warning system, implementation of structural and non- structural measures, strengthening of institutional capacity and community adaptive capacity • All hydro meteorological hazards and risks to be modelled and mapped - basis of project interventions • Provides to climate risk information basis for further development and implementation of the insurance scheme Conclusions & Next Steps
  17. 17. Thank you

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