Extreme weather risk changing Canada's insurance industry, raising costs
CTV
Climate change is driving up insurance rates and raising questions about whether private coverage will even be available for some Canadians in the future.
Climate change is driving up insurance rates and raising questions about whether private coverage will even be available for some Canadians in the future.
The problem could mean the National Flood Insurance Program that Canada is developing to ensure access to affordable overland flood coverage might have to be expanded to wildfires, wind storms and hurricanes in short order.
Statistics Canada's latest inflation report showed home insurance costs were up 8.2 per cent nationally in June, compared with one year earlier. Increases were about 10 per cent in Alberta, British Columbia and Saskatchewan, and nearly 12 per cent in Nova Scotia.
Some of the increase to premiums was due to inflation, but Craig Stewart, vice-president of climate and federal affairs for the Insurance Bureau of Canada, said a big chunk of it was because global reinsurance companies re-evaluated Canada's risk profile and jacked up their prices.
Most companies that sell property insurance in Canada turn around and transfer some of the risk associated with their policies to global companies called reinsurers. So when you make a claim to your local insurance agent, that company will in turn cover some of its expenses by buying insurance from a big global backer.
Stewart said the reinsurance premiums rose between 25 and 100 per cent in the last year, and while not all of it was passed on to consumers, some of it had to be. He said the analysis found Canada among the countries where climate change has affected insurance risks the most.
The Insurance Bureau of Canada reported last year that claim costs for personal property insurance averaged more than $7 billion annually over the last five years in Canada. That compares with $5.8 billion in the previous five years, and $2 billion a year in the late 1990s and early 2000s.
