Canadian Underwriter

Where spring showers have done much of the damage in 2019 1H

August 14, 2019   by Jason Contant

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Payout amounts and the number of claims related to severe weather in Quebec have increased dramatically in the first half of the year compared to 2018, Insurance Bureau of Canada (IBC) reported recently.

Successive weather events marked the first half of 2019, pushing claims up significantly for P&C insurers, IBC said in a press release last week. Total payouts were $292 million in the province, up 165% from the same period last year. As well, the number of weather-related claims was up 63% from the first half of 2018.

Residents carry their belongings through flooded streets after a dike broke causing widespread flooding and forcing thousands of people to evacuate Sunday, April 28, 2019 in Ste. Marthe-sur-la-Lac, Que. THE CANADIAN PRESS/Ryan Remiorz

The spring floods in Quebec cost $127 million, while episodes of torrential rains, strong winds and floods between January and March totalled $165 million.

To respond to demand created by this unusual volume, some insurers had recourse to an exceptional measure authorized by the regulator, Autorité des marchés financiers (AMF), in which out-of-province or retired claims adjusters were allowed into the province to help out Quebec insurers under certain conditions.

AMF announced the change in April. At the time, heavy flooding swept across the province, resulting in more than 6,400 flooded residences and over 10,000 people out of their homes, according to preliminary estimates. Water from the Lake of Two Mountains burst through a natural dike in Ste-Marthe-sur-le-Lac, inundating the suburb west of Montreal.

Months earlier, in late January, a winter storm resulted in multiple reports of road flooding in Montreal and about 42,000 Hydro-Quebec customers were without power.

Canada has averaged $1 billion in insured cat damage ever year over the past decade. Last year, that total reached $2 billion, according to Catastrophe Indices and Quantification Inc. (CatIQ).

As of early July 2019, the estimated cat insured loss across the country sat at $600 million. However, since that time, there have been several other severe weather events, including a reported EF1 tornado in Quebec in late July and a hailstorm in Alberta this month. It’s unclear whether these events meet the cat threshold of $25 million in insured damage.

CatIQ told Canadian Underwriter last week it should have an updated total on insured losses across the country in a couple of weeks.

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