Business interruption to drive insured losses from Alberta floods

Business interruption claims will a major driver of insured losses following the recent severe flooding in Alberta, according to one A.M. Best analyst.

For optional flood coverage in commercial lines, the rating agency believes there is about a 75% take-up rate, senior financial analyst Jacqalene Lentz said in a video from the company.

Lentz recently authored a special report from A.M. Best, which suggested the Canadian property and casualty industry is well-positioned to handle the flooding events.

That’s despite the floods being likely the second worst weather-related event in terms of economic losses, just behind 1998’s ice storm that hit Quebec and parts of Ontario.

Early estimates suggest the insured losses from the event will be at least $1 billion and as high as $3.75 billion, A.M. Best noted.

For personal lines, much of the insured losses will likely be for auto physical damage, Lentz also said.

While A.M. Best said it’s too early to know the full impact of the flood event, it doesn’t expect to take any significant rating actions.