From flooding to storms, insured damage caused by severe weather events hit $3.1 billion in Canada last year, making 2022 the third worst year for insured losses in the country’s history, according to the Insurance Bureau of Canada (IBC).
Among extreme weather disasters, the devastating derecho storm in Ontario and Quebec last May proved to be the most expensive, causing $ 1 billion in damages.
The next most expensive events included hurricane Fiona, which cost $800 million, and summer storms in Western Canada which cost $300 million.
In its report published Wednesday, the national industry association representing Canada’s private home, auto and business insurers, said that the losses in 2022 were unlike those of 2016 — the highest loss year on record — during which the wildfire in Fort McMurray, Alta., caused about 75 per cent of national losses.
“While the $3.1 billion figure is alarming, no single catastrophic event nor any particular region accounted for the majority of losses,” the bureau added.
In 2021, severe weather in Canada caused a total of $2.1 billion in insured damage.
Craig Stewart, vice president, Climate Change and Federal Issues at the IBC, said in the report that the Canadian government has spared “far too little attention” on the implementation of its climate policy.
“Canada is increasingly a riskier place to live, work and insure,” said Stewart, adding that the federal government needs to lead the way in finalizing a National Adaptation Strategy and “boldly funding both community-level infrastructure and property-level retrofits that increase resilience to floods, windstorms, heat events and wildfires.”
In November 2022, the federal government announced $1.6 billion in federal funding commitments to improve Canada’s climate resilience, including projects such as improving public infrastructures in municipalities and townships and flood mapping.
“IBC continues in-depth discussions with the federal and provincial governments on ways to improve the resilience of communities and better manage the costs of flooding for high-risk residential properties in Canada,” the report said.
The report also mentions the bomb cyclone that hit Eastern Canada during the winter holiday season in 2022 causing $180 million in damages. Other events include British Columbia’s winter storm and king tide in December 2022, and Manitoba and Northwestern Ontario’s flooding in April, costing $80 million and $60 million respectively.
In the report, Stewart also cautioned about property insurance becoming more expensive in the days to come.
“In particular, we’re seeing early signs that property insurance may become less affordable or even unavailable as global reinsurers shift capacity away from riskier countries,” said Stewart.
“Now is the time for Canadian insurers and governments to partner on a National Flood Insurance Program to ensure Canadian homeowners remain financially resilient in the face of these growing number and severity of events.”