Canadian insurers paid $1.33 billion in insured losses despite quieter 2017

Published: January 10, 2018

Updated: July 24, 2018

Author: Luke Jones

CATEGORY: | |

Share:

2017 was a relatively quiet year in terms of natural disaster in Canada. No hurricanes has a severe impact in the country, but still the insured losses from cat events surpassed $1.3 billion for the fifth time in the past seven years.

While major catastrophes were fewer predictions about more frequent and severe events held true. Eastern Canada was hit by heavy storms in spring, brining significant flooding to Quebec and Ontario. In British Columbia, the province dealt with a record wildfire season that caused major damage to large area.

Canada avoided a disaster like the 2016 Fort McMurray wildfire, but insurers were still made to pay frequently. According to data from CatIQ Inc., the total insured losses for cat events was $1.33 billion in 2017.

“It’s becoming increasingly common to have Canadian annual insured losses to be greater than $1 billion,” Laura Twidle, director of catastrophic loss analysis at Catastrophe Indices and Quantification Inc. (CatIQ), said in an interview with Canadian Underwriter.

“I would likely expect that to continue to be the trend with those peak event years. We know Fort McMurray brought the Canadian annual loss to the highest it’s ever been, and the 2013 flooding events in Toronto and Calgary stick out as well.”

No major cat events arrived, but there were arguably more individual events. This, Twidle theorizes could be why the industry ended paying more than $1 billion.

“There are so many factors to relate to it,” said Twidle. “There are people having more coverage, more events occurring over populated centres. This summer, the cat season, we had a lot of hail events and thunderstorms throughout the Prairie provinces…It’s not that hard to hit the $25-million [cat] threshold when golf ball sized hail goes over a town like Red Deer [Alta.].”

“This year, we had a lot of flooding, and the companies have started to roll out more flood coverage,” Twidle concluded. “I could certainly see that flooding events may become more of an issue for companies just because of that. You will always have those flash flooding events. They can track over pretty much anywhere, and that can cause sewer pumps to back up and basement seepage as well.”