Reinsurance News

AMA takes legal action to recover $165mn from reinsurers after the Fort McMurray wildfire

14th July 2017 - Author: Luke Gallin

The Alberta Motor Association Insurance Company (AMA) has filed a statement claim with the Alberta Court of Queen’s Bench, in an effort to recover money owed by reinsurers in relation to the devastating Fort McMurray wildfires.

Fort McMurray wildfireThe Fort McMurray wildfires devastated the city and area in 2016, becoming Canada’s costliest catastrophe event, with PCS putting the insurance industry loss at CA$3.98 billion.

More than a year after the event, AMA is taking legal action in an effort to recover money it feels it’s owed by a number of different firms that provided reinsurance protection for the event.

According to statement from the AMA this legal action will not impact AMA policyholders, employees or members, and none of the firm’s reinsurers on its 2017/2018 treaty are involved in the dispute.

According to the AMA, it has settled more than 90% of its claims related to the Fort McMurray wildfires, and has also secured sufficient reinsurance coverage to meet its future needs.

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“This is simply a commercial dispute which is not uncommon in business. The issue is a matter of interpretation of a contract. We have interpreted the contract differently than the reinsurers,” explains the AMA.

So far, the AMA has received $200 million in reinsurance from the event, but says it is owed a further $165 million by reinsurance companies as a result of a contractual dispute, which has driven the AMA to seek a summary judgement.

The AMA has sought legal advice, as feels confident it will recover the money owed, and adds that “Regardless of the outcome, our organization is strong financially.”

“A summary judgment allows the Court to dispose of a civil case without a full trial if it believes the case qualifies. Qualification depends on the evidence providing enough information to fairly and justly adjudicate the dispute,” explains the AMA.

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