Overwhelmed

Daryl Angier, editor

Anyone who pays even passing attention to pop culture knows that zombies are hot right now. Like all the great symbols of the horror genre, interest in zombies is not really about the zombies but fascination with the underlying fears they represent. The world created in the TV show The Walking Dead, for example, is a world defined by an all-pervasive and unrelenting physical threat, and in which all societal mechanisms that protect against the threat have been overwhelmed and destroyed. Every one of the characters is on their own, cast into a Hobbesian state of nature where moral rules no longer exist and don’t even have value.

For fun, we added “zombie apocalypse” as one of the answer options for our January web poll question: What catastrophe are you most worried about for 2014? While we can laugh at the ascendance of the undead as an imaginary threat, some of the events of 2013 have hopefully started discussions about just what it would take to overwhelm the insurance industry to such an extent that it may fail to provide Canadians and the economy with the level of support they need to fully recover from a major catastrophe. One of the themes that emerged in the interviews for the articles in this, our annual claims issue, is that the major Canadian catastrophe events of 2013 severely challenged the industry’s ability to respond in a number of ways. The Alberta and Toronto floods last summer tested adjusters and restoration companies, not just because of the volume of claims, but because the two events came in quick succession on opposite sides of the country.

Now try to imagine a single catastrophic event causing 10 or even 20 times the amount of economic and insured losses as the Alberta floods created. Painting that picture is the purpose of the Insurance Bureau of Canada’s Study of Impact and the Insurance and Economic Cost of a Major Earthquake in British Columbia and Ontario/Quebec, discussed on page 9. A scenario like a magnitude 9 earthquake off the coast of BC (a matter of “when” and not “if”) could well prove to be a back breaker, creating manpower demands that adjusters, restorers and other vendors may not be able to meet, and even pushing some insurers to the brink of insolvency. It’s a horror story no one wants to see come true. Preventing it will mean having the collective vision to plan beyond the current catastrophe cycle.

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Copyright 2014 Rogers Publishing Ltd. This article first appeared in the January 2014 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.