October 28, 2015 by Canadian Underwriter
The Government of Alberta’s announcement this week that it will pump almost $450 million into funding flood protection measures along the Bow and Elbow Rivers shows its “commitment to building resilient communities,” Insurance Bureau of Canada (IBC) notes in a statement late Wednesday.
IBC welcomed Alberta’s move to provide $297 million to ensure communities along the Elbow River are protected and $150 million to the City of Calgary over 10 years for local projects through the Alberta Community Resilience Program.
The funding is meant to help prevent a repeat of the damage and devastation experienced in parts of Calgary and upstream communities during the severe flooding in June 2013, Alberta environment and parks minister Shannon Phillips says.
The flooding in southern Alberta two years ago was the costliest natural disaster in Canadian history, resulting in insured losses of about $2 billion. In total, “more than $6 billion in damage was inflicted on our infrastructure and economy,” Phillips says.
“Across Canada, extreme weather damage has cost insurers almost $8 billion since 2010 and governments across the country many tens of billions of dollars more,” says Bill Adams, vice president, Western and Pacific for IBC.
“We need to take thoughtful and appropriate action to develop strategies that help Canadians protect themselves from the effects of extreme weather. Investment today will pay off in the long term,” Adams says in the IBC statement.
“These investments will make our province stronger and able to handle weather events that have become more frequent and severe,” he points out.
With climate change resulting in more frequent and severe weather events, IBC has made helping Canadians adapt to this new reality a strategic priority for the insurance industry, the IBC statement notes. Insurers are working to educate Albertans about steps they can take to protect their properties, the bureau adds.
With regard to insuring against the devastation that flooding can cause, IBC president and CEO Don Forgeron said during the recent National Insurance Conference of Canada in Montreal that to make overland flood insurance work in Canada, there must be some sort of government involvement in pre-planning, rather than “after-the-fact financial support.”
Noting that some insurers have started offering their own flood insurance products this year, Forgeron suggested that “there is a growing appetite to take on this risk.” That said, “these new products in the market will likely not deal with all of the high-risk properties and for that we believe we need government involvement,” he added.