P&C insurer Definity makes full aggregate reinsurance recovery on Canadian losses
Canadian property and casualty insurer Definity Financial Corporation has utilised the full limit of its aggregate reinsurance cover after losses from multiple catastrophe events in the country, with the wildfires in British Columbia having the largest impact.
Definity pre-announced its third-quarter 2023 catastrophe losses, saying that reinstatement premiums also needed to be paid after reinsurance recoveries were triggered.
The company said that catastrophe events in the quarter are expected to negatively impact its operating income by around $122 million, net of reinsurance recoveries and inclusive of reinstatement premiums paid.
Most of the losses for Definity came in July and August 2023, when it had already estimated $120 million of catastrophe losses after reinsurance recoveries that it anticipated.
The losses fell largely to its personal property book, at $104 million, followed by commercial insurance accounting for $10 million and then personal auto a further $8 million.
In total there were eleven catastrophe events in the quarter that breached Definity’s loss reporting threshold, which is set for events causing gross losses above $2 million and generally greater than 100 claims, or a single claim with a gross loss in excess of $3 million.
The wildfires in British Columbia (BC) represented the largest impact, Definity said.
As we reported yesterday, the wildfires in BC are now estimated to have caused an insurance industry loss of over $720 million.
Definity also took catastrophe losses during the quarter from severe wind and rainstorms that led to flooding in Ontario, Québec, and Nova Scotia, tornadoes in Ontario and Québec, and damaging hail events across Canada.
Because of the frequency and proliferation of catastrophe losses in the quarter, Definity said, “we have fully utilized our catastrophe aggregate reinsurance treaty limit for 2023.”
It’s been a costly period for Canada’s P&C insurance industry, and with recoveries made this may have a bearing on conditions for renewing reinsurance treaties in the country next year.
