Canadian Underwriter

How catastrophes affected Intact’s Q4 numbers

January 9, 2020   by Greg Meckbach

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Intact Financial Corp. is pegging its catastrophe claims at $115 million for the fourth quarter of 2019 alone, more than double the figure for the same period in 2018.

Intact released its $115 million estimated catastrophe loss Tuesday. The company has yet to release its full financial results for 2019. The actual current-year catastrophe loss for Q4 2018 was $55 million.

“Losses were concentrated in Canadian property lines with impacts of approximately $54 million and $48 million pre-tax in commercial and personal property respectively,” Intact said Jan. 8 of its Q4 2019 catastrophe estimate.

For the purpose of its financial results, Intact defines a catastrophe claim as a claim or group of claims, related to a single event, which is larger than $7.5 million for Canada. In the U.S., Intact’s cat threshold is US$5 million.

For the full year, Intact reported earlier its catastrophe claims totaled $330 million, $313 million, $385 million, $116 million, $243 million and $486 million in 2018, 2017, 2016, 2014 and 2013 respectively. The Fort McMurray wildfire occurred in 2016 while in 2013, the industry was hit with the southern Alberta floods. Also in 2013 the July 8 rain storm in the Greater Toronto area cost the industry about $1 billion.

Intact did not mention any specific Q4 2019 events in its release Tuesday. But the Insurance Bureau of Canada noted earlier that from Oct. 30 through Nov. 2, a storm in Eastern Canada cost the industry $250 million in insured damages.

Wind gusts exceeded 100 km/h in several locations along the shores of eastern Lake Erie and eastern Lake Ontario, causing high waves and storm surges. In the Niagara community of Port Colborne, Ont., a 129 km/h wind gust was recorded, IBC said earlier of the Hallowe’en 2019 catastrophe.

In its Global Catastrophe Recap report for November, Aon reported total economic losses from the Hallowe’en 2019 storm system were estimated up to $365 million.

The combined ratio for the Canadian P&C industry was 104.5% during the first six months of 2019, A.M. Best Company Inc. reported during its Canadian market brief this past September. The combined ratio in 2018 was 101.4%, the first year since 2008 the Canadian P&C industry lost money on underwriting.

In 2013 and 2016, Canadian primary insurers were able to unload a lot of their losses from Fort McMurray and the large flooding events to reinsurers, A.M. Best senior director Greg Williams said during the market briefing. But more recently many losses came within the insurers’ retentions.

Canada’s sixth most expensive insured loss in 28 years – the May 4, 2018 wind storm – cost the industry $680 million, A.M. Best reported last year.

Ranking first through fifth were:

  • the 2016 Fort McMurray wildfire at $4 billion
  • the 1998 ice storm at $2.3 billion
  • the 2013 southern Alberta floods at $1.7 billion
  • the July 2013 Toronto area storm at $ 1 billion
  • the August, 2005 thunderstorm in the Toronto area – which caused the bridge carrying Finch Avenue over Black Creek to collapse – at $784 million.

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