A New Breed of Cats?

As we go to press, Ontario has just pledged $5 million to help clean up extensive damage done in the town of Goderich following the touchdown of an F3 tornado packing winds of 280+ km-h. YouTube pictures show historic structures in the downtown area reduced to matchsticks.

Similarly, Atlantic Canada is now mopping up after the remnants of Hurricane Irene brought flooding and extensive property damage to the area. Irene’s visit to Canada as a tropical storm followed a path that caused devastation in North Carolina, New York City and Boston over the weekend of Aug. 27-28. Damage estimates in the U.S. range between $3 billion and $6 billion.

Insured loss estimates for the Goderich tornado and Irene will not likely be available for some time yet. But they underscore the woes created this year by Canada’s second-largest insured disaster – the wildfires in Slave Lake, Alberta. Preliminary figures show the Slave Lake losses cost the Canadian property and casualty insurance industry in the neighbourhood of $700 million.

This has been another tough year for Canadian catastrophe insurers. It isn’t far-fetched to suggest that, when all of the 2011 losses are added up, Canadian insurers will be paying out a cumulative total of more than $1 billion dollars for catastrophe claims losses again this year. This would mark the fourth time in six years that natural catastrophe damages have topped the
$1-billion mark.

Welcome to the ‘new normal’ for Canadian P&C insurers.

Insurers often point to their admirable role as individual ‘good corporate citizens’ in addressing the effects of climate change. These efforts are to be applauded and augmented.

But as the frequency and severity of these natural catastrophe losses increase exponentially, it seems insurers should also be in the vanguard of supporting research on climate change, if they aren’t already.

Insurers constantly reference their own data at public conferences in discussions about catastrophe losses. Bar graphs showing natural catastrophe losses almost always grow taller as they approach the 2005-11 quadrant of the maps in the insurers’ power point presentations.

Despite this trend, which is obvious to insurers, climate change researchers still don’t seem to have a tool or model that would allow them to link climate events in local areas with global system maps that show much broader patterns related to climate change. Presumably if such a link could be made between local and global climate patterns, researchers might be able to say more definitively how global climate change is affecting (or exacerbating) local area conditions. This information would give insurers and the public a better handle on whether the disasters of the type we have seen in 2011 are part of a global trend, or whether they are just flashes in the pan.

Strangely, we know with precise detail how many runs a baseball team will not score when they take their star slugger out of the lineup. And yet, a great deal of our information about our environment seems to come from nothing more than media reports and sharing personal anecdotes. For most consumers, the storms we are constantly hearing about in the media simply ‘feel’ worse than other storms remembered from years past.
Some insurers say the more extensive damage has to do with the expensive stuff people are buying and putting into vulnerable areas of their homes. And to some extent this is true.

But insurers would be doing a real service to their communities (and their industry) by continuing to support and share climate change research that helps the public better understand whether
or not these wickedly nasty weather storm events are a new breed of cat, or whether they are merely random freaks of nature.