For the third time in the past four years, the total estimated insured damage caused by severe weather across Canada has topped $1 billion, the Insurance Bureau of Canada (IBC) reports.
The number reflects estimates reported by Property Claim Services Canada (PCS-Canada), a service that tracks insured losses arising from catastrophic events in Canada.
“Though we won’t see billion-dollar years every year, they no longer will be the rarities they were just a few short years ago,” says Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction (ICLR), a research centre for disaster prevention and communications.
“Canadian insurers and brokers will need to ensure that they are ready for the present and future state of extreme weather-related insurance claims in Canada, and get really efficient at handling large claims volumes if they aren’t that efficient at it now. The reputations of insurers and brokers are made, and unmade, as a result of such events.”
Data show that insured losses due to severe weather in 2012 now total $1.12 billion. Insured weather related losses in Canada amounted to approximately $1.7 billion in 2011, $915 million in 2010 and $1.7 billion in 2009.
There was a time when topping $1 billion of severe weather claims constituted a major event. Canada’s all-time record for a single claims event remains the 1998 Ice Storm, which triggered more than 840,000 claims in Canada and the United States and caused more than $1.4 billion in damage in Canada alone.
But now severe weather patterns are becoming the ‘new normal,’ McGillivray told Insurance Business.
In Canada, the largest single claims event in 2012 included the wind, flooding and hail storms that battered Calgary and surrounding areas this past August. “An update to insured damages pegs that storm now at more than $500 million,” says Heather Mack, director of government relations for IBC’s Alberta chapter.
“Superstorm” Sandy, where rain and winds damaged the U.S. northeast, including New York and Atlantic City, hit across Ontario and Quebec and topped $100 million in damages in October.
Storms in Edmonton and across southern Alberta in July 2012 cost insurers about $180 million.
And in May, a weather system that hit Ontario and Quebec resulted in high winds and flooding, amounting to a further $260 million in damages.
“Insurers are seeing the financial impacts of severe weather first-hand,” IBC’s senior vice president of policy and chief economist Gregor Robinson said. “Canadians are already witnessing the impact of severe weather in terms of lost lives and injuries, families displaced from their homes, and towns that are devastated.”
