Fiona Storm Damage to Cause Record but Manageable Insured Losses in Atlantic CanadaInsurance Organizations
Fiona, a post-tropical cyclone, hit Atlantic Canada over the weekend, which, in addition to loss of life, caused extensive property damage, flight cancellations, and power loss for hundreds of thousands of homes. The storm will likely cause record insured losses in Newfoundland and Labrador, New Brunswick, Nova Scotia, and Prince Edward Island. However, given the relatively small scale of the Atlantic Canada property insurance market, insured losses should remain in line with other recent severe weather loss events across Canada, which were manageable for the industry.
Key highlights include:
-- Fiona will likely produce record insured losses for the Atlantic Canada property and casualty (P&C) insurance market.
-- Risk exposure in Atlantic Canada remains manageable for Canadian P&C insurers because of their national diversification and scale.
-- Adequate reinsurance coverage remains a key tool for insurers to manage risk exposure to Atlantic storms, which may worsen because of climate change.
“Fiona will likely be one of the largest catastrophic events in history for Atlantic Canada,” said Patrick Douville, Vice President, Insurance. “Initial estimates indicate that insured losses will be in the $300 million to $700 million range for the industry. This would be significant but not large enough to affect the financial strength of the large, nationally diversified insurance groups which are the top participants in the property insurance market in Atlantic Canada.”