Flood product sales to boom as flood risk soars

Flood product sales to boom as flood risk soars | Insurance Business

Flood product sales to boom as flood risk soars
Almost one in five Canadian households has some level of exposure to flood risk according to mapping carried out by the Insurance Bureau of Canada (IBC); and yet flood insurance is difficult to impossible to purchase for many; this was the message of chief executive officer of the IBC, Don Forgeron writing in a national newspaper earlier this week..

In his contribution to the Globe and Mail Forgeron was stark in his predictions.

“Climate change has moved from future threat to present danger. Extreme weather events are increasing in frequency and severity. The Parliamentary Budget Officer (PBO) recently estimated that the financial cost of natural disasters driven in part by climate change will, over the next five years, be far greater than previously estimated.”

And the lion’s share of this financial cost will be attributable to flooding.

The numbers are harrowing,” Forgeron writes. The PBO predicts that storms, hurricanes and floods linked to climate change will cost the federal disaster fund $900-million annually over the coming five years,” a figure that compares to an average, in adjusted 2014 dollars of closer to $54 million a year for the years spanning 1970 to 1994. The forecasted $900 million per year estimation is far above the amount currently earmarked to manage these events by Ottawa.

“The PBO itself pointed out that the creation of a flood insurance market in Canada could significantly reduce the financial burden on taxpayers.”

Until 2015 there was no dedicated flooding product for residential clients in Canada, meaning the products available now might well be unknown to their most natural purchasers. Brokers often face a similar dearth of information despite the broker’s duty to explain accurately to the consumer what they are buying, a task made all the more difficult as the field is one that lacks standard terminology.

For those interested in learning more about the future of flood insurance and coverage, Insurance Business magazine is pleased to announce the inaugural Flood Risk and Insurance conference to be held in Toronto on June 16th at St. Andrew’s Club & Conference Centre.

The conference, subtitled Understanding Canadian Flood Landscape, Mitigating Risk through Collaborate Industry Efforts and the future of Overland Flood Coverage in Canada, brings together stakeholders from all levels including carriers, brokers, reinsurers, various levels of government, and solution providers to clarify the future of flood coverage in Canada and offer an understanding of the flood products already available to Canadians.