Intact Financial, the largest property insurer in the country, revealed this week premiums it charges across various lines of insurance coverage have jumped 4.5 per cent in recent months.
On home policies specifically, rates have floated upward by 10 per cent or more on average.
A central reason: “For the second consecutive quarter, the harsh winter took its toll,” Charles Brindamour, Montreal-based Intact’s chief executive said on a conference call on Wednesday.
Damages from felled trees on vehicles and homes because of ice storms in December were deepened in January and February courtesy of burst pipes and an increase in auto accidents as most of the country slipped into a deep freeze.
In all, Intact shelled out $75 million for weather-related claims in the final months of winter—three times the norm, experts say.
A catastrophic year
For the year, Intact covered $600 million in insured losses, the result of a string of extreme weather events beginning with last summer’s flooding of southern Alberta followed by southern Ontario’s own storm-related floods.
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To offset the losses, insurers—led by Intact—have raised rates far above what would be considered routine, analysts say.
The question on many people’s minds, notably among policy holders facing big hikes at renewal time, is whether the magnitude of the increases will persist.
“We’d view the quarter as a one-off due to weather,” BMO Capital Market analysts said Thursday.
More hikes ‘up for debate’
Still, Intact certainly isn’t ruling out further extreme weather-related hikes.
The 10 per cent rise on home insurance combined with other measures, such as lifting flood deductibles and halting earthquake coverage on condos in British Columbia is enough for now, the company said.
“But this is up for debate,” Brindamour said. “I must admit that after five or six quarters of what I would call bad results… we’re on high alert.
For their part, investors in Intact don’t appear overly concerned—the company’s share price hit an all-time high of $72 on the Toronto Stock Exchange on Wednesday after the release of the company’s earnings.
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