Insurance loss data for improved climate change adaptation. Conditions for data sharing and utilization
MetadataVis full innførsel
Climate change has led to an increased risk of damage to buildings and infrastructure. Norwegian municipalities have intensified their efforts to address climate change adaptation and the prevention of climate-related damage due to natural hazards. The Norwegian Directorate for Civil Protection (DSB) has developed a so-called ‘Knowledge Bank’, which is a Norwegian web-based data platform containing information about risk and vulnerability related to natural events. The Knowledge Bank serves to compile civil protection data and makes these available to municipalities, providing them with an improved overview and knowledge about undesirable events and natural disasters as a basis for cost-benefit analysis, risk and vulnerability assessments. The platform also includes data related to natural and weather-related damage derived from insurance companies. Previous research related to insurance data and the Knowledge Bank carried out at the Klima 2050 Centre has addressed attitudes to data sharing among insurance companies, the value of insurance data, and the potential to use these data to predict events. It has also addressed the municipalities' initial perceptions and experiences. Expectations linked to a new system for sharing insurance loss data in the Knowledge Bank are high, but several issues still need to be resolved before the system can be fully exploited. There is need to improve the understanding of key factors related primarily to data sharing and quality, as well as the relevant regulatory frameworks. This will enable insurance data to become available via the Knowledge Bank so that they can be utilized by municipalities in a way that will benefit wider society. This report presents the results of a study that addresses the critical factors required for the establishment of a new system allowing insurance companies to share insurance loss data with municipalities, using the Knowledge Bank platform. Method In this study, we have included the perspectives of the key organizations, the DSB and Finance Norway, because both are playing key roles in the development and establishment of the insurance data system incorporated in the Knowledge Bank. Data have been collected mainly from interviews with key informants working in these organisations. The informants were selected on the basis of their experience with the development and implementation of the Knowledge Bank, and their insights into prevailing conditions. Primary data have been combined with data gathered from public sources and documentation provided by key informants. Draft summaries of data collected from the interviews, as well as a draft version of the report, were sent to the informants for their feedback and quality assurance. Results The new insurance data system is based on a new legal foundation rooted in the Norwegian Civil Protection Act, which came into force on 1 May 2021, and the proposal of a new statutory regulation governing the Knowledge Bank, which is expected to come into force during 2022. Insurance loss data that are currently available in the Knowledge Bank include historical data of damage that is registered during the period 2013 to 2018. These data have several quality deficiencies and have been used for testing purposes. The proposed Knowledge Bank regulation, currently in preparation, include requirements related to data concerning new damage events that occur from and including the date of the proposed regulation’s enactment. It is expected that a continuous supply of standardized data from the insurance companies will start by the date of enactment of the proposed regulation. This study highlights several important conditions governing the new insurance data sharing system. Conditions related to the legal authorisation for data sharing include the authority of the DSB to process data, the withdrawal of the duty of confidentiality incumbent on the insurance companies, and a clear purpose and common willingness among the involved parties to work to benefit wider society. Moreover, Finance Norway's statistics on natural damage and weather-related water damage, the standardisation of data registration by insurance companies, and access to updated information on the part of the DSB are important for the establishment of adequate reporting procedures and the transfer of data to the Knowledge Bank. Furthermore, there are additional factors influencing the availability of data to the Knowledge Bank, including data quality assurance carried out by Finance Norway and the DSB, the map visualization of address level information, the protection of personal data, the DSB's experience of testing the historical data set, as well as the combination of historical and new data. This study shows that the legal foundation has been critical. It will be crucial to see how the proposed regulation will be adopted in practice and, in particular, how procedures within the insurance companies for reporting and registering data are practised. Results indicate that it may take some time before the new procedures are in place in the companies, and for the data to meet the quality requirements set out in the proposed regulation. This underlines the importance, in terms of the expectations of users and other stakeholders, of adopting a long-term strategy by which data will be improved over time. This study further emphasizes the importance of data quality for users, especially in view of the inherent weaknesses of historical data. Despite quality deficiencies, older data can be valuable to users. The mixing of higher quality new data with historical data containing weaknesses may challenge users’ abilities to estimate data reliability. We thus propose to raise awareness among users of the importance of differentiating between different levels of data reliability, while at the same time improving historical data so that they meet the new requirements. The new system still requires further testing, and it will be important to learn and share experiences of current systematic procedures related to progress monitoring and the communication of status updates. Further research More research is required if we are to improve our understanding of how to safeguard data quality in data sharing systems and of how users can utilize shared data. Studies are proposed that address how quality can be improved, including the development and testing of new measures and systems, with the involvement of several organisations. We also propose studies that will provide better insights into how the municipalities can use the data to provide added value. For example, showcases can be used to assist the dissemination of knowledge about the potential value of the data and their limitations. Process models demonstrating how to utilize insurance loss data in municipal planning can also be developed and tested. More research is also needed into users' perspectives. New investigations of use and the perceptions of various user groups are proposed that may contribute with further detailed insights that can add value to the further development of the insurance data system.