IBC updates assessment of massive flooding and derecho

IBC updates assessment of massive flooding and derecho | Insurance Business Canada

IBC updates assessment of massive flooding and derecho

The Insurance Bureau of Canada (IBC) has published its latest updates on two of the biggest and most recent catastrophe events: the 2021 flooding in southern British Columbia and the 2022 derecho storm that struck both Ontario and Quebec.

According to the bureau, the 2021 BC flooding is now estimated to have caused $675 million in insured damage, based on new data from Catastrophe Indices and Quantification Inc. (CatIQ). The previous insured loss estimate for the disaster was pegged at $515 million.

IBC noted that the November 2021 floods continue to be BC’s most costly severe weather event in history.

But while the estimated insured damage due to the 2021 flooding has grown, IBC prefaced that the majority of the increased loss is due to business claims where commercial insurance is more readily available. By comparison, many of the residents affected by flooding were in high-risk flood areas and flood plains where residential flood insurance is not easily available.

“While the insured losses from the November flood events are increasing, it is clear that the overwhelming majority of costs for this disaster will be borne by government,” commented IBC Pacific and Western vice president Aaron Sutherland. “As we continue to see the increasing impacts of our changing climate, it’s clear much more must be done to enhance our resilience to these risks and build a culture of preparedness moving forward.”

Meanwhile, the May 2022 derecho storm has been estimated to have caused more than $875 million in insured damage, IBC said citing CatIQ data. When broken down between Ontario and Quebec, the former saw over $720 million of estimated damage, while the latter province saw $155 million.

IBC noted that the derecho, which swept through Ontario and Quebec on May 21, 2022, has been ranked as the sixth largest insured loss event in history. Nearly 30,000 households in both Ontario and Quebec suffered power outages for over a week following the storm, and at least 11 people were killed, mostly by fallen trees.

“As we begin to contemplate the enormity of the financial losses, we must pause for a moment in the face of the loss of life,” said IBC Ontario vice president Kim Donaldson. “This was largely an insurable event and insurers have been on the ground since day one, working hard to help their customers throughout the entire claims process.”