How several Canadian insurers are tackling wildfire risk

Definity Financial Corporation is the latest insurer to partner with an American wildfire risk management company to help reduce claims costs and protect customers in Alberta and British Columbia with wildfire protection services.

Intact Financial Corporation, Aviva Canada and Gore Mutual Insurance Company are among the other insurers that have already partnered with Montana-based Wildfire Defense Systems (WDS) for wildfire loss prevention and mitigation services.

Definity tells Canadian Underwriter the service became available as of July 1 at no additional cost to eligible Economical, Family Insurance and Sonnet personal property customers in Alberta and B.C. whose personal homes or rented dwellings are threatened by wildfire. It applies to new and renewal business.

In Canada, WDS currently only offers services in B.C. and Alberta, Definity tells CU.

Among other measures, WDS helps protect personal property by:

Temporarily relocating flammable materials, such as firewood, propane tanks, and outdoor furniture
Clearing brush and vegetation and pruning trees and shrubs
Ensuring doors, windows and garages are closed
Applying biodegradable, non-toxic fire retardant on combustible material
Creating a buffer (defensible space) around structures.

The insurers all say they understand the devastation wildfires can bring. For its part, Definity says the partnership helps customers “protect what they cherish the most amid increasing threats of wildfire, while reducing claims costs.”

Aviva Canada tells CU the free service helps affected Alberta and B.C. customers “protect their properties so they can return to normal as quickly as possible.”

Aviva’s partnership with WDS has been in effect for customers in the two provinces since the end of May. The insurer has sent letters to eligible customers letting them know about the service to help protect them for the 2024 wildfire season.

Last year, Canada saw $945 million in insured damage from wildfires from $3.1 billion in total losses from severe weather events. More than 2.8 million hectares were burned in B.C. last year, and Alberta saw more than 2.2 million hectares burned.

’80 times more claims’

“For Aviva in 2023, we saw 80 times more claims than 2022,” the insurer reports.

A recent survey commissioned by Aviva found 79% of Canadians said they are worried about the 2024 wildfire season, but only 22% were taking measures to protect their homes.

If a customer’s property is threatened by an active wildfire and under an evacuation order, WDS may enter the evacuation zone and take the aforementioned actions to attempt to mitigate fire loss to the property. They may also set up temporary sprinkler systems to wet down property area to reduce the chance of ignition, Aviva adds. If the threat is considered extreme, WDS may apply fire-blocking gel and fire retardant to the property and surrounding vegetation to prevent ignition.

“Climate-driven disasters are very stressful events and we’ve been looking at new ways to help minimize the impact for our customers,” says Susan Penwarden, Aviva Canada’s managing director of personal lines. “Several factors, including climate change, are lengthening the wildfire season. Our primary focus is to make sure our customers, and all Canadians, are prepared for these events and help them become more resilient against climate change.”

In Gore Mutual’s case, the partnership is for residential and commercial building policyholders in B.C., the insurer reported in late May. Gore Mutual says they decided to protect both personal and commercial customers’ properties because both are at risk during a wildfire. “As well, WDS’ offering for commercial lines is a good fit for what we tend to write.”

The mutual insurer is in the process of reviewing the feasibility of using WDS’ services for Alberta customers, “but believe there is a strong likelihood that we will be rolling it out there, too.”

For Intact, the pilot project is for eligible Intact Insurance, belairdirect and Intact Prestige personal property customers. The services began in early May, Intact’s senior vice president of the western region, Luisa Currie, told CU at the time. The services are for customers whose property is threatened by a wildfire less than five kilometres away.

WDS has been serving policyholders for 16 years, and has responded to more than 1,300 fires across its 22-state service area. “That means they’ve addressed 37,000 homes and have had a success rate of 99% in preventing a total loss,” Currie says.

Feature image: Gore Mutual has partnered with Wildfire Defense Services to protect policyholders’ property from wildfire. (CNW Group/Gore Mutual Insurance Company)