IBC launches major initiative designed to help Canada prepare for major earthquake

Insurance Bureau of Canada (IBC) has launched a major research initiative intended to help Canada prepare for a devastating earthquake in B.C. and eastern Canada.
IBC president Don Forgeron outlined the bare bones structure of the initiative in a speech outlining IBC’s priorities for the upcoming year. He was speaking at the IBC’s 11th Annual Regulatory Affairs Symposium in Toronto on Oct. 27.
“The longer we go without an earthquake in B.C. and in the eastern Ontario Region, the more likely it becomes,” Forgeron said. “A major earthquake would not only be a challenge to the P&C industry, but to the economy as a whole.
“Recent events have shown that even countries that have more experience with earthquakes and earthquake preparedness than we do can still get it wrong. So we need to begin thinking and preparing.”
IBC’s project includes five key components, Forgeron said.
•A study of the potential economic and insured losses arising from major earthquakes in B.C. and eastern Canada.
•A consultation paper on the on the tax treatment of earthquake reserves, and on the potential of Insurance-Linked Securities or catastrophe bonds as an alternative source of capital in Canada.
•Research on government programs for mitigation, emergency preparedness and response in Canada as well as in other jurisdictions around the world.
•Research into consumer expectations and attitudes around this great risk and earthquake insurance.
•Research and development of a position on the potential roles, policies and programs of government and the P&C industry for financial recovery after a major earthquake.
“As you can imagine,” Forgeron said, “this is a major project that will see itself rolled out over the next 12 to 24 months.”