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What is the Municipal Risk Assessment tool?

The Municipal Risk Assessment Tool, or MRAT, combines information about municipal infrastructure, current and future climate patterns, and past home insurance claims. In other words, it is a tool that assesses all these factors in order to give city engineers a snapshot of vulnerabilities in their infrastructure now and in the future.

Why is this important if you’re a homeowner? It used to be the greatest risk to your home was fire. Now, it’s water.

And what’s contributing to this? Outdated storm and wastewater infrastructure is a major issue.

The fact is, extreme incidents such as mass flooding, storms, and unpredictable weather, are now occurring at a rate that is 10 times more frequent than it was in the past. This is having an impact on the infrastructure that’s intended to move water away from homes and businesses.

Water related damages to homes are increasing

Think the Calgary or Toronto floods were just an anomaly? Unfortunately, that is not the case. Extreme weather occurrences, such as massive storms and flooding, that used to happen every 40 years, are now happening every 5 to 6 years. This is the equivalent of 20 more days of rain annually than what was experienced 65 years ago.

This has caused an increase in damages to homes and businesses, resulting in higher insurance claims and costs. Canada’s insured loss is now close to $1 billion annually—a huge increase over the past decades.

Because of this alarming trend, the Insurance Bureau of Canada developed a unique and effective risk assessment tool that focuses on flooding trends. This risk assessment tool seeks to predict potential issues in municipal infrastructure that leads to flooding.


The MRAT tool is so sophisticated there has been interest in it from insurers around the world that are grappling with the same climate and infrastructure challenges.
Bill Adams, IBC

The MRAT helps municipalities to target problem areas

More importantly, it also helps municipalities allocate funds from their budgets to the areas that need the most attention. The MRAT was launched in three municipalities to test it—Coquitlam, BC; Fredericton, NB; and Hamilton, ON.

While developing the MRAT, the Insurance Board of Canada asked themselves the following questions:

  • What are the current risks, based on infrastructure and climate conditions, of sewer-backup claims?
  • Are there future risks, based on infrastructure and climate conditions, of sewer-backup claims?
  • Is the existing infrastructure performing up to an adequate level?
  • Are there issues in the current infrastructure that require modification?

What exactly does the MRAT do?

The MRAT is developed based on a risk formula which calculates hazards, exposure, and vulnerability. The MRAT data is then displayed as a risk map.

Red areas on the maps, for example, indicate that flooding of basements is more likely, while green areas show where it is less likely.

Keep in mind, if there is a heavy downpour or violent storm, many sewer and storm water systems across Canada simply cannot handle the amount of water. Flooding is the inevitable result.

Engineers utilize these maps and areas to plan and adjust their priorities regarding repair, support, and funding for infrastructure. The MRAT is the only one of its kind in the world and is proving to be a unique and effective tool.

Once the areas on the maps are designated, the municipal engineers can repair or replace storm and sewer drains and assess service levels. While the MRAT may one day be used for different types of natural occurrences, such as wind, fire, and earthquake, the particular scenario that is the focus for the time being is flooding.

As mentioned above, the MRAT began their pilot project in 3 municipalities across Canada and are now functioning nation-wide. In the future, it’s predicted that this tool can be used in other areas of risk management as well, such as water network failures and urban flooding.

The next step is to take the prototype and modify it based on what it has taught engineers and underwriters. These findings will provide direction on what the Insurance Bureau of Canada will do with it in the future.

Benefits of the MRAT

Three factors that are driving up insurance premiums are climate change, aging municipal sewer and stormwater systems, and lifestyle changes such as finished basements.

Since many Canadian municipalities currently have very few tools to measure and predict severe weather events, the MRAT will be crucial to provide informed predictions, as opposed to guesswork when it comes to natural disasters.

The ability to quantify the risk being underwritten with respect to water damage is still a work in progress, but clearly, one driven by the interests of government, the insurance industry, and homeowners.

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