Three major catastrophes in the span of one month have cost Canada’s largest insurer almost half a billion dollars in claims costs.
Intact Insurance announced it is expecting to pay out more than $495 million in claims costs to approximately 16,000 Canadian customers following flooding catastrophes in Calgary and Toronto, as well as a derailment in Lac-Megantic in Quebec.
“The devastation brought on by recent flooding and torrential rain is unprecedented,” said Charles Brindamour, CEO of Intact Financial Corporation.
“The scope of the damage and destruction that we have witnessed in recent weeks is a stark reminder that we must adapt the protection offered to Canadians to ensure it remains sustainable in light of the greater prevalence and severity of weather events.”
Intact’s anticipated insured claims costs break down as follows:
• Alberta storms and flooding (June 20): $300 million
• Lac-Megantic train derailment (July 6): $25 million
• Greater Toronto Area rain storm (July 8): $170 million
Projected industry losses as a result of the three tragedies were not available at press time.
As Insurance Business has reported earlier, some Canadian brokers believe the insured damage losses from the three tragedies could easily top out at $3 billion.
The bulk of the losses in the recent catastrophes have been in commercial lines, as noted by Joel Baker of MSA Research.
“Unlike many other Canadian catastrophes, this one will hit the commercial writers much harder than personal lines,” Joel Baker, president of MSA Research, wrote in his MSA Quarterly Outlook Report. “No doubt that Q2 results will be nasty for many commercial writers and insurers.”
The losses in commercial lines, as well as sewer backup losses in Calgary and Toronto, may put a new spin on the debate about what happens next.
“As citizens look to insurers to finance flood risk, what happens if the reverse occurs – a withdrawal of capacity for sewer backup?” said Brooke Hunter of Hunters International Insurance. “It’s too early to predict the consequences of this summer’s weather, but I don’t see increased ‘water damage’ capacity from the private market in the cards.”
