April 26, 2018 by Staff
“This serves to reinforce the fact that $1 billion a year in cat losses has become the new normal in Canada,” says Kenn Lalonde, chair of the board of directors of the Insurance Bureau of Canada (IBC).
Speaking at IBC’s annual general meeting in Toronto on Thursday, Lalonde observed that “a good chunk of that $1 billion in insured cat losses is a result of water damage and flooding.” He pointed to the major flooding that took place in Ontario and Quebec last spring as examples.
Lalonde said IBC is encouraging a “whole-of-society” approach to addressing flood risks, which would entail governments, insurers and homeowners each bearing “some of the risk and [receiving] some of the reward.”
He said IBC will encourage all levels of government to implement risk-based land use planning, improve aging infrastructure and tighten building codes. Homeowners can protect themselves by moving valuables out of their basements, or choosing to move off of a flood plain.
Lalonde said the Canadian insurance industry has made strides in managing flood risks since introducing overland flood insurance.
“Over the past three years, a number of Canadian insurers have introduced overland flood insurance as an additional option for residential insurance products,” he said. “Take-up rates have started to increase. And strong competition within the industry is driving more insurers to enter the market; many have signalled plans to offer some form of flood insurance in the next 12 to 18 months.”
Lalonde also noted that IBC has made significant progress in raising awareness about flood risks, having hosted industry roundtables at the Globe Leadership Summit for Sustainable Business in Vancouver last month. The association also recently signed on to the United Nations Environment Program for Financial Institutions and the Principles for Sustainable Insurance Initiative.
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This story was originally published by Canadian Insurance Top Broker.