You may have to move

The rising cost and difficulty of insuring against climate risks may force people to move, the head of Canada’s top financial regulator has warned.

Rising damage from extreme weather does not appear to be a regulatory issue, but rather a cost issue, Peter Routledge, the country’s superintendent of financial institutions, told the audience in Vancouver.

“Part of that may be recognizing that some areas have a higher cost, and businesses or homes that are there in those areas may have to bear higher costs or may have to relocate,” he said. on stage at the National Insurance Conference of Canada. on monday. “It’s a harsh thing to say, but that’s the reality of climate change.”

Asked if properties in parts of Canada could become prohibitively expensive or impossible to insure, Routledge said there has been a decline in the availability of earthquake insurance in British Columbia, and certain flood insurance products may be tightened.

But there is “nothing as big” in Canada as the so-called “insurance deserts” now affecting parts of Florida and California, Routledge said in an interview.

Canada was hit by several natural disasters in 2024: flooding in Toronto and parts of Quebec, a devastating hailstorm in Calgary that hit nearly one in five homes, and fires in the country’s western provinces that burned part of the city Jasper. , Alberta. Insurers received 228,000 insurance claims in July and August – more than they received in any summer in the past 20 years, according to the Insurance Bureau of Canada.

Catastrophic losses are “well above expectations” in the third quarter for Intact Financial Corp., Canada’s largest property and casualty insurer. The weather also hit Toronto-Dominion Bank’s insurance unit, with costs 20 per cent higher than a year earlier, weighing on its latest financial results.

“We just had the worst natural disaster losses in Canadian history. In five years, it won’t be the biggest,” Routledge warned the room full of insurance professionals. Its Office of the Superintendent of Financial Institutions regulates banks and most property and casualty insurers.

“The risk environment will not feel less burdensome or intense. I’d like to leave you feeling like, “Hey, it’s okay, we can hang out.” There is no expiration in this risk environment.”

Photo: A burned vehicle after a wildfire in the Baie-James region of Quebec, Canada, Monday, June 10, 2024. Photo credit: Brett Gundlock/Bloomberg

Related:

Copyright 2024 Bloomberg.

TOPICS
Canada