Canadian Underwriter
Feature

Beauty and the Beast


March 1, 2014   by Angela Stelmakowich, Editor


Print this page Share

Heavy snow in Japan that closed many roads, choking off the delivery of goods and parts to about a half-dozen car makers, recently prompted the suspension of operations for as long as several days.

Activity has since resumed, but the event shows how less dramatic events (compared to, say, hurricanes and quakes) can have in terms of business and personal operations.

In December, an ice storm provided parts of Ontario with its own bit of drama, before the unwelcome show travelled eastward into Atlantic Canada to do the same.

The resulting twisted winter wonderland – ice-cloaked tree branches gorgeous up close, but decidedly less attractive as the view widened to take in the damage – will not rival Canada’s most expensive natural disasters in terms of insurable losses.

But it will certainly be among the many events at home and elsewhere in 2013 to leave a mark. Be it ice, rain, wind snow or a stubborn polar vortex, these events contribute to some hefty losses, both insured and not.

The ice storm, leaving an estimated $200 million in claims in its wake, pushed Canada’s insured losses from severe weather beyond the $3-billion mark. The estimate from the PSC-Canada Service follows four straight years where losses were plenty high enough, each year more than $1 billion.

Weather-related catastrophe costs were hardly lost on insurers in Canada, including a number of big players that made reference to the impact of severe weather in their respective financial results.

And Canada is not alone in feeling the chill. In the United States, for example, the Insurance Information Institute reports that Property Claims Services at Verisk Analytics estimated insured losses from winter storms this year to be in excess of $1.5 billion, with about 175,000 claims paid to policyholders.

This substantial hit includes just two of four major winter storms to date.

Though the recent ice storm in Ontario and eastward is a smaller sister to the 1998 event, the holiday-season assault nonetheless left many cold and in the dark for days, all while public services usually winding down for the annual fill of festivities were left scrambling to meet rather pressing needs.

At the height of the storm, Toronto Hydro reported that approximately 300,000 customers were without power.

By early January, claims were already being received related to falling ice, trees and branches and flying debris that damaged homes and vehicles, sewer back-up, frozen or busting pipes, and fridge and freezer losses. There were also some business interruption claims.

The list south of the border this winter is pretty much the same, with III noting that insured losses relate to property damage to homes and buildings from roof collapses, downed tree limbs and power lines, and frozen pipes bursting, along with auto accidents.

Business interruption and supply chain losses are also being reported.

Here at home, Toronto city officials estimated in early January that it could cost more than $75 million to clean up the thousands of downed tree limbs, and to repair and maintain the tree canopy, after the ice storm. By late February, the Ontario government noted it would provide up to $190 million to help municipalities pay for the cost of related clean-up and recovery.

Despite severe winter weather causing heavy property damage and business interruption losses in the U.S., A.M. Best notes insurers there will be likely to handle losses. “A.M. Best expects national insurers and reinsurers to have no difficulty in bearing these losses,” it adds.

“As often happens in weather-related events, the greatest proportional impact may be on those insurers most concentrated by geography or line of business where the weather took its greatest toll,” it adds.

The same is expected to hold here at home.

But it cannot be ignored that severe weather is leaving its mark more severely and frequently of late, something that will increasingly need to be taken into account should another event, perhaps not as easily absorbed, occurs.


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*