By: Luke Jones, Published on September 19, 2017 09:33 AM, Last Update on September 19, 2017 06:35 AM
In British Columbia this summer, it has been hard to escape fires. Thousands have been caught up in the worst wildfire season in the province’s history, and those who escaped direct impact of the blaze has seen it dominate the news and political agenda.
B.C. has been in a state of emergency for months, and currently over 770 fires still burn larger than 0.01 hectare. If May 2016’s Fort McMurray was a single devastating event, the B.C. season has been consistently damaging over an extended period.
However, we already know Fort McMurray impacted the insurance industry negatively. It was the largest insurance loss in Canada’s history and cost the industry nearly $4 billion. Companies were impacted for the rest of the fiscal year because of the Alberta wildfire. Will the busy B.C. wildfire season have a similar impact?
Exact costs are hard to estimate considering fires still blaze around the province. However, Bill Gatewood, corporate vice president and director of personal insurance, Burns & Wilcox, believes insurance companies are better equipped to deal with the fallout than they were with Fort McMurray.
“We have a situation where the industry is very overly capitalized, so there’s a lot of money and a lot of capacity,” Gatewood claimed, while speaking to Insurance Business. “As horrific as the BC wildfires are – particularly for the people who live in and around the province – from an insurance industry perspective, they won’t be much of a blip in terms of harrying the industry from a capital perspective.
“The BC wildfires alone wouldn’t do anything to harden up rates, raise premiums or put carriers in a precarious financial position. It’s absolutely terrible for the people involved but from an industry perspective, the impact won’t be that large.”
“An overly capitalized industry is in a strong position to pay claims,” said Gatewood. “When you have a catastrophic situation like the BC wildfires, paying claims is important, but responding well to the incident goes far beyond just being able to pay the customer.
“The most important thing the insurance industry does is helping people put their lives back together. It’s the entire claims process and value-added services that really count.”