As Flood Barriers Fail, Building Footprints can be The First Defence in Flood Risk Assessment

This article is by Heikki Vesanto, GIS Manager, LexisNexis Risk Solutions, UK and Ireland

Devastating floods are becoming more frequent in the U.K. and Ireland due to climate change. Winters are getting wetter, while summers are getting drier and hotter. The floods we are seeing today could be dwarfed by those we see in the future and insurance providers need to prepare by using building footprints as the basis for a deeper level of property risk assessment.

Flood defence failures

While the U.K. Government has committed 2.65bn to building flood defences – insurance providers cannot solely rely on these barriers to protect the properties they are insuring. This is largely because many defences were built to cope with less extreme weather. Just look at the failure of flood defences in Brechin in Scotland during Storm Babet in October 2023. This was a £16m defence built at a height of 3.8 metres to cope with a 1 in 200 year event. The river reached 4.4 metres high topping the wall, causing devastation in the local community. It is simply the sheer volume of water we are getting in storms that is the biggest problem. Single day rainfall events are projected to increase by 14%v and these are the kind of rainfall events that cause flooding.

Geospatial intelligence data

It remains vital that insurance providers utilise as much geospatial intelligence as they can to understand flood risk, factoring for the presence of defences but also the risk of fluvial flooding versus surface water and where that water will go in a flood.

To help understand flood risk, the address point, the location the local authority has captured for an address, for the property to be insured is often the starting point. That address point is a single point dropped into a property and while basing a flood assessment on that single point might seem like a very precise approach, one point is not a “property” and therefore risk assessment might miss crucial insight, particularly in the case of larger properties.

The risks of buffer zones

Alternatively, a ‘buffer zone’ is drawn around that address point of 10, 15, 20 or 25 meters. This approach has its benefits but also has some shortcomings.

If the perimeter goes too wide, then the risk to the property could be overestimated, leading to potentially inaccurate pricing or a missed policy sale as the property is assessed as being outside of the insurance provider’s risk appetite. Conversely, if the perimeter of that buffer zone is too narrow, then crucial flood risk information could be missed.

Buffer zones have their place in risk assessment but the starting point should actually be the footprint of the property.

Building footprints for precise flood scoring

Based on the location, shape and size of the property, a footprint can offer a far more precise basis for flood risk assessment. It becomes much simpler to assess if any part of the property lies in a flood risk zone. Additionally, elevation data above the nearest flood source can help assess potential flood levels and the presence of defences can identify areas at risk of defence failures.

Geospatial intelligence data visualisation

This type of property level and building footprint level pricing and risk scoring is crucial as climate risks increase and applies to other natural perils such as subsidence and windstorms. It allows insurance professionals to delve down to the full risk for a single property to help ensure customers are offered policies and pricing relevant to their individual risk.

Additionally, if a more complete picture is needed, visualisation of the risk enables insurance providers to understand their exposures and accumulations in one location. For example, through geospatial intelligence data visualisation tools, it is possible to see how many other properties are covered in the location and which are affected as a flood takes place.

Keeping customers protected

Ultimately, geospatial intelligence data gives the market the power to predict with better accuracy the frequency and intensity of extreme weather events, changes in temperature and other environmental factors that impact insurance risks. It not only offers a more comprehensive understanding of those risks to support pricing, going forward, by understanding the impact of climate events in the past, but also helps insurance providers refine models and make informed decisions to help keep their customers better protected from extreme weather events.