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Fort McMurray wildfire to cost The Co-operators an estimated $70 million to $90 million


May 24, 2016   by Canadian Underwriter


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The Co-operators General Insurance Company has estimated that the Fort McMurray wildfire will cost it between $70 million and $90 million.

While access to the affected area remains restricted, The Co-operators’ preliminary estimate indicated that the after-tax cost of the wildfire to the company’s consolidated, net of reinsurance and inclusive of reinstatement premiums, will likely amount to between $70 million and $90 million. To date, 4,376 claims have been reported to Co-operators General and its subsidiaries, including property, auto, commercial and farm insurance claims, The Co-operators said in a press release on Friday.

A giant fireball is seen as a wild fire rips through the forest 16 km south of Fort McMurray, Alberta on highway 63 Saturday, May 7, 2016. THE CANADIAN PRESS/Jonathan Hayward

A giant fireball is seen as a wild fire rips through the forest 16 km south of Fort McMurray, Alberta on highway 63 Saturday, May 7, 2016. THE CANADIAN PRESS/Jonathan Hayward

“This has been a devastating time for the community and residents are looking forward to returning home and starting to rebuild their lives and their community,” said Kathy Bardswick, president and CEO of The Co-operators, in the release. “While the return home will mark the start of a new phase for the community, it will also be a challenging time for residents and businesses – and we will be there to help our clients through it.”

Earlier this month, Economical Insurance estimated that its pre-tax losses related to the fire would be between $35 million and $45 million, net of reinsurance recoveries and reinstatement premiums. The initial loss estimated is based primarily on claims reported to date, known exposures in the area, and reported percentage losses in various parts of the community.

Intact Financial Corporation’s assessment of its insured damaged using satellite imagery and its exposure geocoding technology ranged from $1 to $1.20 per share, the insurer said on May 9.

As of 3:45 p.m. on May 23, fire conditions remained extreme in northeastern Alberta, with the wildfire remaining out of control, the Government of Alberta said in a statement that day. It was estimated to cover 522,892 hectares, including 2,496 hectares in Saskatchewan.

The government has established a preliminary re-entry plan and it is anticipated that residents can begin going home June 1. A voluntary, phased re-entry plan is planned from June 1 to June 4. The phased re-entry plan for all oilsands camps in the Regional Municipality of Wood Buffalo is underway.