Solution Apply an insurance-grade, five-step climate risk assessment to a utility's most critical facilities to quantify the cost of failing to adapt, then extend the analysis to cascading impacts across other infrastructure providers, businesses, insurers and lenders at city-region scale. Key challenge Neither the city-region authority nor the water utility could quantify what it would cost if critical water infrastructure were not adapted to future flood risk, and the cascading consequences for transport, electricity, businesses, insurers and lenders sat outside anyone’s assessment - so the true impact of climate risk was being systematically underestimated across both public and private sectors. Context Greater Manchester has experienced several severe flood events over the past decade that have damaged homes, businesses and infrastructure across its urban and peri-urban areas, causing millions of pounds in economic losses. Storm Desmond in December 2015 alone caused financial losses to United Utilities of approximately GBP 19.5 million; Storms Desmond and Eva together are estimated to have caused GBP 1.6-2.3 billion in economic loss, with insured losses of GBP 900 million to GBP 1.2 billion. Average annual rainfall in the region increased by about 7% from 1961 to 2004, while winter precipitation rose by as much as 50% over the same period. UK Climate Projections 2021 indicate extreme rainfall events will occur with greater frequency, with winter precipitation potentially increasing in intensity by up to 30% by the 2050s, and modelling indicates peak river flows could rise by 70% by the 2070s under high emissions scenarios. Between June and November 2024, insurance Fellows were seconded through the Global Risk and Resilience Fellowship - a partnership between Howden, the Resilient Cities Network and the Sustainable Markets Initiative - to work with Greater Manchester Combined Authority (GMCA), United Utilities, the Cabinet Office and the Ministry of Housing, Communities and Local Government (MHCLG). Solution in practice The project built a five-step climate risk assessment methodology combining JBA Risk Management's 5-metre resolution fluvial and pluvial flood modelling with insurance industry loss models, climate consulting and analytics. Step 1 mapped United Utilities' 3,000+ facilities and over GBP 3 billion of insured value, applied criticality and vulnerability criteria across 19 facility types, and narrowed to the five facilities most critical to Greater Manchester’s water supply (combined facility value GBP 114.8 million). Step 2 modelled present-day and future exposure at the 1-in-1,000-year return period across baseline, 2030s, 2050s and 2080s horizons under RCP2.6/SSP1 and RCP8.5/SSP5. Average Annual Loss - a proxy for insurance premium - was shown to rise 23% by 2100 across the five facilities, with existing flood protection mitigating AAL by around 10%; under RCP8.5, today's 1-in-1,000-year fluvial event becomes a 1-in-509-year event by 2080 and the pluvial equivalent a 1-in-472-year event. Step 3 developed climate risk narratives and a risk matrix aligned to United Utilities’ risk appetite across financial, operational downtime, customers affected, reputational, environmental and health and safety consequences, with Transport for Greater Manchester and Electricity North West engaged to identify cascading risks. Step 4 produced a costed, complexity-scored menu of adaptation options across governance, finance, physical and technological, nature-based, and knowledge and behavioral categories, screened against UKCIP no-regrets, low-regrets, win-win and flexible/adaptive criteria and flagged for maladaptation risk, with co-benefits identified for each. Step 5 set out the system-level picture: business interruption, supply chain disruption and property damage cascading through to lenders and insurers, with SME loan defaults rising 2.6 times within two years of a flood event, interest rates up 6.4 basis points for businesses in flood-prone areas or lending withdrawn entirely, premiums 25% above average and excesses reaching GBP 25,000. Impact / outcome Average Annual Loss across five critical facilities shown to rise 23% by 2100; costed menu of adaptation options and a replicable methodology. Next steps The report sets out three key insights for United Utilities. First, there are insurance and other benefits to applying the methodology across the full portfolio: doing so would provide a quantitative flood profile of each facility, enabling United Utilities to discuss and structure a bespoke coverage Program with its insurance partners - for example grouping facilities by risk profile, excluding or reducing coverage for lower-risk facilities and securing higher coverage for higher-risk ones - and a more comprehensive view of where to focus adaptation investment. Second, a quantitative cost-benefit analysis is needed: the report provides the cost of inaction, highlights gaps in current understanding of climate risk and proposes a qualitative cost-benefit analysis of adaptation solutions, and the next step is to model the proposed solutions quantitatively; United Utilities could also discuss high-priority adaptation measures with its insurer to demonstrate their value and how they can support a stronger insurance Program. Third, collaborative adaptation matters: a focused approach to data gathering and the establishment of a collaborative group with other major infrastructure providers would be the most effective mechanism for ongoing dialogue on interdependencies. For government, the report highlights a lack of corporate involvement in conversations around climate risks to major infrastructure providers, recommends including corporate perspectives in decision-making, and identifies a credible risk that stakeholders across the UK public and private sectors are underestimating the true impact of climate risks - calling for mechanisms for data sharing among agencies and infrastructure providers. The methodology is designed as a blueprint for other utility companies and major infrastructure providers, can be applied to hazards beyond flooding, and is well placed to be amplified in the UK Government Resilience Framework or other municipal resilience frameworks, with national government having a role in setting enabling policies and standards, amplifying best practice, and convening senior decision makers to align incentives for resilience building. Organizations involved Authoring: Resilient Cities Network Actors: Howden; Sustainable Markets Initiative; Greater Manchester Combined Authority (GMCA); United Utilities; Cabinet Office; Ministry of Housing, Communities and Local Government (MHCLG); JBA Risk Management; Transport for Greater Manchester; Electricity North West Implementation partners Insurers; Local Governments; Infrastructure Owners & Operators; Regulators & Policymakers; Data Providers