Part of the Whole

2017 saw devastating above-average hurricane activity in the Caribbean and the United States. Worldwide, there have also been deadly quakes, costly windstorms, extensive flooding and destructive wildfires. The latter once again includes Canada, where the aftermath of Fort McMurray is still being felt and (re)insurance pricing remains out of whack with the actual risk.

It is on this front that a silver lining, however faint, may begin to reveal itself.

It would likely not come as a shock to many — if, in fact, any — if the Canadian insurance industry experiences another year of billion-dollar losses from natural catastrophes. As flooding and wildfires continue to exact high tolls, coupled with the threat that the worst from either is likely yet to come, the hope that pricing will inch closer to actual risk is transforming into resolve that it must do so.

While it may, ultimately, be a benign year for reinsurers in Canada, the tipping point on pricing may have been reached, with some players expecting increased rates for 2018. Views on how capacity will be affected in Canada is less consistent, ranging from some tightening to no change whatsoever.

There are also concerns regarding the potential impact of non-modelled perils, but 2017 offers the opportunity to rethink approaches being used to ensure any developments are taken into account.

Read the full article in the Digital Edition of the November 2017 Canadian Underwriter.

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