Climate change and increasing urbanization are projected to result in an increase in surface water flooding and consequential damages in the future. In this paper, we present insights from a novel Agent Based Model (ABM), applied to a London case study of surface water flood risk, designed to assess the interplay between different adaptation options; how risk reduction could be achieved by homeowners and government; and the role of flood insurance and the new flood insurance pool, Flood Re, in the context of climate change. The analysis highlights that while combined investment in property-level flood protection and sustainable urban drainage systems reduce surface water flood risk, the benefits can be outweighed by continued development in high risk areas and the effects of climate change. In our simulations, Flood Re is beneficial in its function to provide affordable insurance, even under climate change. However, the scheme does face increasing financial pressure due to rising surface water flood damages. If the intended transition to risk-based pricing is to take place then a determined and coordinated strategy will be needed to manage flood risk, which utilises insurance incentives, limits new development, and supports resilience measures. Our modelling approach and findings are highly relevant for the ongoing regulatory and political approval process for Flood Re as well as for wider discussions on the potential of insurance schemes to incentivise flood risk management and climate adaptation in the UK and internationally.

Flood risk emerges from the dynamic interaction between natural hazards and human vulnerability. Methods for the quantification of flood risk are well established, but tend to deal with human and economic vulnerability as being static or changing with an exogenously defined trend. In this paper we present an AgentBased Model (ABM) developed to simulate the dynamical evolution of flood risk and vulnerability, and facilitate an investigation of insurance mechanism in London. The ABM has been developed to firstly allow an analysis of the vulnerability of homeowners to surface water flooding, which is one of the greatest short-term climate risks in the UK with estimated annual costs of £ . bn to £ . bn. These costs have been estimated to increase by -% over the next years due to climate change and urbanisation. Vulnerability is influenced by homeowner's decisions to move house and/or install measures to protect their properties from flooding. In particular, the ABM focuses on the role of flood insurance, simulating the current public-private partnership between the government and insurers in the UK, and the forthcoming re-insurance scheme Flood Re, designed as a roadmap to support the future a ordability and availability of flood insurance. The ABM includes interaction between homeowners, sellers and buyers, an insurer, a local government and a developer. Detailed GIS and qualitative data of the London borough of Camden are used to represent an area at high risk of surface water flooding. The ABM highlights how future development can exacerbate current levels of surface water flood risk in Camden. Investment in flood protection measures are shown to be beneficial for reducing surface water flood risk. The Flood Re scheme is shown to achieve its aim of securing a ordable flood insurance premiums, however, is placed under increasing pressure in the future as the risk of surface water flooding continues to increase.

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The study presents a methodology to characterise short or long-term drought events, designed to aid understanding of how climate change may affect future risk. An indicator of drought magnitude, combining parameters of duration, spatial extent, and intensity, is presented based on the Standardised Precipitation Index (SPI). The SPI is applied to observed (1955-2003) and projected (2003-2050) precipitation data from the Community Integrated Assessment System (CIAS). Potential consequences of climate change on drought regimes in Australia, Brazil, China, Ethiopia, India, Spain, Portugal and the USA are quantified. Uncertainty is assessed by emulating a range of global circulation models to project climate change. Further uncertainty is addressed through the use of a high emissions scenario and a low stabilisation scenario representing a stringent mitigation policy.Climate change was shown to have a larger effect on the duration and magnitude of long-term droughts, and Australia, Brazil, Spain, Portugal and the USA were highlighted as being particularly vulnerable to multi-year drought events, with the potential for drought magnitude to exceed historical experience. The study highlights the characteristics of drought which may be more sensitive under climate change. For example, on average short-term droughts in the USA do not become more intense but are projected to increase in duration. Importantly, the stringent mitigation scenario had limited effect on drought regimes in the first half of the 21 st century,showing that adaptation to drought risk will be vital in these regions.