Canada’s 2023 severe weather losses fourth costliest on record

Canada’s 2023 severe weather losses fourth costliest on record – IBC | Insurance Business Canada

Catastrophe & Flood

Canada’s 2023 severe weather losses fourth costliest on record – IBC

Insurers call for national flood insurance action amid biting costs

Catastrophe & Flood

By
David Saric

Canada experienced $3.1 billion in insured losses driven by severe weather in 2023, according to the Insurance Bureau of Canada (IBC) and Catastrophe Indices and Quantification Inc (CATIQ).

This is fourth-worst year for losses in the nation’s history, with a record-breaking increase in wildfires nationwide, while flooding continued to cause destruction in nearly every region across Canada.

The four costliest years on record have all occurred within the last decade.

Some of the noteworthy weather events from last year include:

The Atlantic Canada cold snap ($120 million)
Ontario and Quebec spring ice storm ($330 million)
The Tantallon, Nova Scotia, wildfire ($165 million)
Nova Scotia flooding ($170 million)
Prairies summer storms ($300 million)
The Winnipeg hailstorm ($140 million)
Ontario severe summer storms ($340 million)
the Okanagan and Shuswap, BC, area wildfires ($720 million)
The Behchokǫ̀-Yellowknife and Hay River, NWT, wildfires ($60 million)

Having surveyed insurers from coast to coast, IBC said it saw no change in the availability and affordability of wildfire coverage.

Many Canadians cannot access flood insurance, while some households are having difficulty obtaining coverage for earthquakes and related phenomena.

Revised risk modelling and escalating losses are making Canada a riskier place to insure, while a national flood insurance program has yet to materialise.

“The federal government committed to a national flood insurance program in last year’s Federal Budget. However, progress has stalled, leaving too many Canadians vulnerable to the effects of our changing climate,” said Craig Stewart, IBC vice-president, climate change and federal issues.

“Once launched, this program would provide Canadians living in high-risk areas with affordable financial protection and peace of mind when a flood strikes. Details of the program must be shared with our industry and the provinces this winter if it’s to be operational before the next federal election.”

Additionally, Stewart stated that the nation’s P&C insurance industry “has offered to support a comprehensive and cost-neutral flood insurance program that will replace costly Disaster Financial Assistance and save governments and taxpayers money.”

“After seven years of study, government officials and home insurance professionals agree on this solution,” Stewart said. “Canadians now need the federal government to move forward with this program and announce details in the 2024 Federal Budget.

“The homes and financial health of over 1.5 million Canadians are at high and growing risk.”