Changing weather patterns continue to be a top risk for the insurance industry, causing billions of dollars in payouts by governments and insurers. David McGown, senior vp of strategic initiatives at the Insurance Bureau of Canada, said at a broker forum in Toronto held by Gore Mutual that both sets of numbers have been rising dramatically decade by decade. He said in the 1970s, Ottawa spent on average $40m to $50m in disaster assistance. That figure rose to $1bn in the 2010s. Insurance payouts have also increased substantially. Through the 1980s and 1990s, insurers paid roughly $400m a year. This decade that figure rose to $600m and last year it skyrocketed to $5.2bn. “That was mostly Fort McMurray, but even if you take that off the table insurers paid out $1.5bn in water, hail and other natural disasters,” Mr. McGown said. Gore Mutual claims vp Neil Weir said insurers could use the increase in severe weather as an opportunity to provide better coverage. “(Insurers) can design the overland water product to identify that the risk is increasing,” he said. “And we will be able to protect consumers with an innovative product.” He said overland flood products are also good for brokers because it is a new premium and risk for which they can charge. He said flood risk has transformed the home insurance policy. “I think that most of the product development opportunities for water has been that … a homeowner policy is a water product with some fire mixed in,” Mr. Weir said. Mr. McGown said while diversity in the marketplace is a good thing from a competitive standpoint, insurers need to keep in mind that diversity can also cause confusion. In Fort McMurray, even though most claims were common fire claims, neighbours insured by the same company sometimes received different settlements.
More coverage of Gore Mutual broker forum is presented in Thompson’s June 19 weekly edition. Email email@example.com or use the ‘subscribe’ tab for a copy or to subscribe.