Exposure related to insuring personal lines of business in general continues to see steady growth in the Canadian P&C insurance industry, with a whopping $9.3 trillion of personal property assets in Canada now insured against fire, according to Catastrophe Indices and Quantification Inc.
CatIQ’s latest annual update of its industry exposure database (IED), released Monday, contains 2021 year-end estimates of Canadian industry property sums insured. CatIQ, a subsidiary of Zurich-based PERILS AG, reported last year a compound annual growth rate (CAGR) of 82% in the flood personal line.
Personal property insured against fire has shown a CAGR of 3.7% since the start of data collection in 2016, CatIQ says in a press release.
Personal property flood exposures were even more pronounced, doubling since 2016 to $5 trillion last year. “We did see some growth in the coverage for this peril again,” CatIQ managing director Laura Twidle tells Canadian Underwriter.
Why the steady growth in personal lines? Is it due to more fires or more severe fires, for example?
“This is likely due to an increase in overall exposure,” such as more homes being built, Twidle says. “Unlike some add-on peril coverages like flood or earthquake, if a home is insured, it would have fire coverage.”
As for earthquake, “across Canada and comparing to personal fire, about 12% [of] the number of risks are covered for earthquake, and 7% based on [total insured value],” such as building/contents value and additional living expenses coverage, Twidle says. “Of course, this could vary substantially by region.”
CatIQ’s database outlines peril (windstorm, hail, fire, sewer-back up, flood, earthquake and volcanic eruption), line of business (personal, commercial and motor hull) and type (building, vehicle, contents, business interruption and ALE, where applicable), among others.
“The industry, and other stakeholders, now have access to six years of exposure data,” Twidle says in the release. “This is beneficial to the industry to better understand their catastrophe risk and where the insurance gaps exist.”