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Insured Canadian catastrophe damage nears record $5bn in 2016

9th January 2017 - Author: Staff Writer

Severe storms, wildfires, and floods ravaged Canada in 2016, making it the highest year on record for insured catastrophe damage payouts.

In 2016 insured damage topped $4.9bn Canadian (US $3.6bn) – a figure well over the previous annual record of $3.2bn in 2013 –  according to Catastrophe Indices and Quantification (CatIQ), a company that provides analytical and meteorological information on Canadian natural and man-made catastrophes to the industry and its stakeholders.

The Fort McMurray wildfires cost over twice as much as the most expensive natural disaster on record for the country, accounting for about $3.7bn in insured damage.

Don Forgeron, President and CEO of the Insurance Bureau of Canada (IBC) said; “severe weather due to climate change is already costing Canadians billions of dollars annually.”

Natural disasters are sweeping across Canada with greater severity and frequency than ever before; “The record damage reported in 2016 is part of an upward trend that shows no signs of stopping,” Forgeron continued.

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“That is why Canada’s property and casualty insurance industry is calling on governments across the country to come together and implement expansive climate policies that will better prepare Canadians and their communities for when disasters strike.”

The Fort McMurray Wild Fire, a series of ice, prairie, and Western Canadian storms, and Windsor and Atlantic Flooding were among the biggest natural disasters to devastate Canada in 2016.

Forgeron said the reach of the storms and their effect on Canadian communities was “staggering”.

“Canadians must be prepared both physically and economically for when these disasters inevitably strike.”

He emphasised the need for industry and government to work together to form a comprehensive climate strategy; “Addressing current gaps in public policy and consumer protection can only be possible if industry and government work together in the areas of mitigation, adaptation and emergency management.”

“Our industry will continue to press for a National Flood Program to make our communities stronger, safer, and more resilient when severe weather happens.

“Canada lags behind every other G7 nation when it comes to flooding and we must do more to be prepared.”

Canada has seen federal disaster relief spending rise from an average of $40 million a year in the 1970s to over $600mn a year in the first six years of this decade.

The annual economic cost of disasters around the world has increased five-fold since the 1980s from an average of $25bn a year to $130bn a year in the 2000s, according to IBC data.

Reinsurance capital has taken the brunt of the Fort McMurray wildfire loss, with much of the damage costs set to be paid for by major global reinsurers.

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