By: Luke Jones, Published on July 8, 2016 02:58 PM, Last Update on July 31, 2016 11:59 AM
The devastating wildfire in Fort McMurray, Alta. has led to many advocating a rethinking of how Canada prepares for climate events. The wildfire became the largest insurance loss in Canadian history. Worryingly is that it was in Alberta, home to the second largest loss in Canada. Now the Insurance Bureau of Canada is advocating building codes and zoning laws to protect properties and stop development in at-risk regions.
“There is no question that Alberta has seen a disproportionate number of significant events over the course of the last number of years,” Bill Adams, vice president western and Pacific for IBC, said July 7 during a press conference.
“I will leave it to the meteorologists and climatologists and others who have a much better appreciation and understanding of all the dynamics that lead to that, but ultimately what we are seeing is that our climate is changing and the long term trends are directly the result of some of those dynamics, so what we are advocating as an industry is that we need to think through an approach that recognizes that the environment in which we are providing coverage for risks is changing and has changed.”
The IBC spoke during a press conference on July 7 and said the most recent estimates for the Fort McMurray insurance loss were around $3.58 billion, provided by Catastrophe Indices and Quantification Inc.
“Our thinking as a society needs to change to make certain we are reflecting in building codes and as we develop urban and rural municipalities, we are doing so in a prudent way, and keeping people out of harm’s way,” Adams said July 7 during the press conference on the Fort McMurray wildfire. “Historically, we have not done that well in Canada and perhaps less so in Alberta and unfortunately, we are living with the consequences now. But we have a number of proposals that would reframe the risk profile … and begin to reverse the trend of these significantly damaging events and the impact on Albertans.”
Proceeding Fort McMurray was the 2013 floods that hit southern Alberta were the previous insurance loss record holder. That 2013 event resulted in a $1.7 billion loss for insurance companies off a total economic loss of around $6 billion.
“Those were two events that really caused Canada’s insurance industry to pause and take stock of whether in fact the current way in which we deal with water damage was the best that we could do as an industry,” Adams said. “We have spent the last two and a half or three years literally exploring different programs for the way in which other G7 countries deal with water related losses and we have come up with what we think is a fairly good proposal that we have engaged the province and the federal government on, around redefining how you distribute the risks associated with water.”