IBC urges gov action as summer weather events in Canada drive insured losses of CAD 7bn+

Citing initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ), which place the combined insured loss of four catastrophe weather events this summer in Canada at more than CAD 7 billion, the Insurance Bureau of Canada (IBC) has called on governments to collaborate on reducing disaster risk.

In just July and August, the Toronto and Southern Ontario floods, the Jasper, Alberta wildfire, the Calgary, Alberta hailstorm, and the Quebec floods led to severe damage and insurance industry losses of an estimated CAD 7.1 billion.

According to CatIQ, the flooding in Toronto and other parts of Ontario caused insured losses of CAD 940 million, the Jasper wildfire losses of CAD 880 million, the Calgary hailstorm losses of CAD 2.8 billion, and the Quebec flooding losses of CAD 2.5 billion.

As a result, the summer of 2024 is now the “most-destructive” season in Canada’s history in terms of insured losses from severe weather, with the July and August events taking year-to-date insured losses to more than CAD 7.7 billion.

Highlighting just how severe insured weather losses have been so far this year in Canada, the next costliest year for the country was in 2016 at CAD 6.2 billion, driven by the Fort McMurray, Alberta, wildfire.

Insurers in the country paid out CAD 701 million annually, on average, for severe weather losses from 2001-2010, making the number reported in 2024 losses to date a tenfold rise.

Celyeste Power, President and Chief Executive Officer, IBC, commented, “This has been a devastating summer for hundreds of thousands of Canadians. Relentless storms, fires and floods have resulted in approximately 228,000 insurance claims – a 406% increase compared to the 20-year average.

“These events are escalating at a shocking rate and Canada is simply not prepared. The insurance industry is committed to working with governments across the country on a collaborative approach to adapting to our changing climate and building resilient communities. Canadians deserve this type of leadership from their elected officials and this level of commitment from the industry they rely so heavily upon.”

A major factor for the lack of preparation on Canada’s side is due to the federal-provincial debates on how best to reduce emissions overshadowing all efforts to coordinate and invest in climate adaptation, notes the IBC.

Craig Stewart, Vice-President, Climate Change and Federal Issues, IBC, added, “Insurers are now paying out more in claims for a single event than the $1.9 billion that the federal government has allocated to climate adaptation over the past decade. Canada needs to get ready for the next disaster.

“This is not the time for finger-pointing, this is the time for governments and the private sector to work together to better protect Canadians and our communities. This is a whole-of-society challenge and requires all leaders and stakeholders to come together to develop a national action plan to ensure Canada is better protected. We all have a role to play in helping communities prepare for and recover from severe weather events.”

Stewart concluded, “In June 2023, the federal government launched an impressive National Adaptation Strategy but little progress has been made towards achieving its targets at any order of government. As costs from climate-fueled disasters mount, action from governments to reduce risk is stalled.

“Municipalities are being funded to build new homes on flood plains and areas prone to wildfire. Other orders of government need to support resilient building so that insurance is available and affordable for homeowners in the future; this includes investments in disaster mitigation such as flood defenses, upgrades to stormwater infrastructure, and programming to help fire- and flood-proof new and existing homes.”

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