How this year’s CAT losses are trending

The Chaudiere River flooded and forced the evacuation of 230 buildings and 36 people in Beauceville, Quebec. THE CANADIAN PRESS/Jacques Boissinot

Canada is well on its way to cracking the $1-billion threshold in insured catastrophe losses yet again as we enter the second half of 2019.

Catastrophe Indices and Quantification (CatIQ) told Canadian Underwriter Wednesday that the estimated catastrophic insured loss so far this year sits at $600 million. The updated number comes after the company pegged insured damage from Spring floods in Quebec, Ontario and New Brunswick at upwards of $208 million.

Canada has averaged $1 billion in insured CAT damage every year over the past decade.

Last year, insured CAT damage reached the $2-billion mark. That prompted one author in Canadian Underwriter‘s forthcoming 2019 Stats Guide to wonder whether or not $2 billion in annual insured losses might be the new normal.

Given the current pace of CAT activity, it appears we may not reach such heights in 2019, although anything can happen.

In eastern Canada, home insurance saw the brunt of insured damage from flooding at nearly $160 million, followed by business insurance at almost $40 million. Insured damage in auto came in at more than $10 million, the Insurance Bureau of Canada said in a news release.

More than 60% of the recent flooding costs came from Quebec, which saw $127 million in insured damage, followed by Ontario at $74 million and $6 million in New Brunswick. IBC blamed overflowing rivers as the most common cause of damage leading to flooded roads and basements, submerged vehicles and shifting home foundations. Roof leaks and sewer backups were also caused by heavy rain.

It didn’t help that earlier heavy rains and snowmelt were already affecting water levels; the threat of more triggered flood warnings and watches across the three regions. IBC officials are quick to point out that severe weather events caused by climate change are happening with greater frequency.

“It is important that consumers take precautions and secure their property to minimize potential damage,” said Kim Donaldson, Ontario vice president at IBC. “They should also understand their insurance policies and know whether they have overland flood coverage. It’s key to know what’s covered before storms like these, or other catastrophes, strike.”

A mixed bag of wet, warm and windy weather hit the areas in a series of waves, affecting 9,800 homes and 17,000 residents in Quebec, 6,800 homes and 900 residents in New Brunswick and 2,000 home and 1,600 residents in Ontario. The first was over a three-day span starting with rain on Apr. 17 in southern and north-central Ontario, and carrying east. It intensified, bringing between 35-60 mm of rain. Wind gusts of 90-100 km/h also hit southern Quebec on Apr. 18. A sudden spike in temperature saw 20 cm of snowpack melted in Quebec City while north-central Ontario saw its snowpack reduced to just trace amounts by Apr. 20.

Two more periods of rain hit the regions. It started May 1 in Ontario and continued to the next day while spreading north and east, finishing in Quebec and New Brunswick on May 2. A brief dry spell was followed by more rain in eastern Ontario and southern Quebec on May 9.

IBC once again called for a national flood action plan, calling for federal investment in mitigating future impacts of extreme weather and to build resilience to its damaging effects.

“In Atlantic Canada, particularly in New Brunswick along the St. John River, it is clear that significant flooding is no longer a question of ‘if’ or ‘when’ but it’s a question of how many communities will be affected,” said Amanda Dean, IBC’s Atlantic vice president.