Canadian insurance industry full of 'competitive collaborators'

Canadian insurance industry full of 'competitive collaborators' | Insurance Business

Canadian insurance industry full of

A new independent national research body was launched by the Canadian Government in January to bring clarity to Canada’s climate choices. The Canadian Institute for Climate Choices (CICC), made up of academics and policy experts across the country, will undertake evidence-based and integrated research, analysis and engagement to help decision-makers and Canadians understand the impact of climate-related policy decisions.

In its initial report published on January 21, Charting our Course, the CICC provides four key recommendations for policymakers and governments. According to the Institute, governments need to: broaden their objectives for climate policy; acknowledge and embrace Canada’s role in global outcomes; expand the scope, scale, and pace of climate policies; and look for integrated solutions that drive multiple benefits.

Read next: Canada’s battle with climate change, and how it impacts insurers

One thing that absolutely needs to be at the core of Canada’s climate resilience efforts, according to the CICC and other similar research bodies, is teamwork – not only among policymakers and governments, but also among key industry stakeholders (like the insurance and reinsurance industry) and with the Canadian public.

This is where Canadian insurers and reinsurers have a leg up, according to Monica Ningen, president and CEO of Swiss Re Canada. Speaking at the CatIQ Connect conference in Toronto she said: “This country is full of friendly competitors. [Insurance and reinsurance] companies in Canada absolutely compete – there’s no question about that. But when it comes to topics like [climate change and disaster resilience], they’re pretty darn good collaborators.

“I think that’s a big difference in Canada compared to some other parts of the world. If you look at the industry associations, they’re staffed with people that will roll up their sleeves and try to tackle something like the flood topic together to say: ‘How do we collectively solve this as partners sitting arm to arm, recognizing that we will still turn around and compete from an insurance or reinsurance standpoint?’ That’s why we can potentially do something here that hasn’t been done in other parts of the world. With that said, there are many examples across the world of different countries that are tackling [these issues] already. So, from that standpoint, I think we have some big risks that we need to solve.”

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In 2015, the Canadian Commission on Building and Fire Codes under the authority of the National Research Council (NRC) introduced new rules for seismic risk in Canada’s national building codes. The codes now require all buildings throughout Canada to be designed for earthquake forces, regardless of the level of seismic risk.

This was a significant national policy decision, according to Keith Porter, research professor, Natural Hazards Center, University of Colorado Boulder, and one they would struggle to reach across the border in the US.

The earthquake expert commented: “In the United States, I’ve been talking with my peers among the structural engineering community about increasing design strength and stiffness in new buildings. I’ve been talking about making our buildings 50% stronger and stiffer, and I’ve gotten tremendous pushback. Even if my community embraced that idea, it would take us six years minimum to get that into our building codes.

“Canada made a decision a couple of years ago on seismic risk and is now designing buildings for the 2,500-year earthquake zone. […] It used to be two-thirds of that level of shaking, but they got rid of the two-thirds factor. [Canada was able to do that] because the decision makers are far fewer number. They recognized that it was a good idea, and were able to make that decision without involving several industries across an enormous country. Canada’s small size is an advantage when it comes to being nimble and making resilience management decisions.”