P&C industry joins the $3-billion Cat club (again)
For the second year in a row, Canadian P&C insurers have become members of the unenviable $3-billion Cat club while paying out natural catastrophe damage losses.
This year, damage losses were primarily so-called ‘secondary perils’ such as severe weather storms and, of course, wildfires. The counts aren’t in yet for damage caused by Hurricane Lee in Atlantic Canada, which would be considered a major peril.
“We have surpassed $3 billion for the year,” Catastrophe Indices and Quantification Inc. president and CEO Laura Twidle confirmed to Canadian Underwriter in an email. “[A] sizable amount given there was no ‘big’ event (like the Derecho of 2022, Calgary hail of 2020, etc.) to help get it there.
“This year had an unprecedented number of catastrophes, especially in late July and August.”
Joel Baker, president and CEO of MSA Research, told the National Insurance Conference of Canada in late September the catastrophe count at that point had reached 23. A catastrophe is any natural disaster causing more than $30 million in insured damages. Previous to that, there were a total of 17 NatCats in Canada in all of 2022, and 16 in 2021.
Wildfires were 2023’s headline event in Canada.
B.C. has seen a record number of wildfires this year, making it all the more likely the P&C industry would see some kind of wildfire Cat event. In early September, Yellowknife, NWT, ended an evacuation order that saw 20,000 people leave the city under threat from nearby wildfires.
All told, DBS Morningstar predicted wildfire losses would fall anywhere in the range of between $750 million and $1.5 billion.
“This year, Canada has not just broken the all-time record for area burned, it has obliterated it,” McGillivray told CU in late August. “Currently, more than 14.1-million hectares have been charred, more than double the previous record set in 1989 when 7.6 million hectares burned, and it’s only August.
“More than 5,800 fires have been recorded this year, and while things have settled down in the east, B.C. is having its worst year ever. With so much fire on the landscape, the chances of an event like this were dramatically increased.”
Atlantic Canada has also had its wildfire issues this year, with the Tantallon wildfire in the Halifax, NS, area causing an estimated $165 million in insured damage, about 90% of it property damage.
But the east coast has also had large flooding events. A flood in Nova Scotia in July cost an estimated $170 million. And claims counts are still coming in for Hurricane Lee, which hit Nova Scotia and New Brunswick in September as a post-tropical storm. Adjusters on the scene expect Lee’s damage to be less than the damage caused last year by Hurricane Fiona, which cost the industry $800 million in claims payouts.
All told, Cats in Nova Scotia alone in 2023 have totalled $1 billion in insured losses, Baker said.
Feature image courtesy of iStock.com/shaunl
