The bottom line of catastrophe: How catastrophic (CAT) events are impacting the insurance industry worldwide
17 July, 2024
In this new series of spotlight articles, we look at how CATs are affecting different countries all over the world. These are snapshots of various countries CAT history and are designed to give the reader a basic understanding of the relevant issues.
First on the list is Canada. In 2023, severe weather was responsible for over $3.1 billion in insured damage, according to the Insurance Bureau of Canada.
This is the second year in a row that Canada’s CAT related insured damage have exceeded the $3 billion threshold. This trend looks likely to continue in 2024 as we continue to see Canadian CAT events, most recently wildfires. These fires, some of which are described as “Zombie” fires, have survived underground since 2023 and are set to incur even more losses than last year.
While Western Canada has so far been quiet, despite the presence of Zombie fires over the winter, Eastern Canada may be in for an active summer. Most recently fires in Labrador caused an evacuation of Churchill Falls leaving a power plant to operate remotely and the power lines to mines in Western Labrador have been damaged leaving mines and the towns of Wabush and Labrador City without power.
It is interesting to note that the losses have predominantly occurred outside of the winter months. This would suggest that Canada’s CAT events are mainly unexpected, which subsequently makes damages more difficult to mitigate. The geographical spread of these events displayed in the IBC article indicates that Canada’s vast nature creates challenges for CAT event response.
In recent history, Canada has routinely surpassed $2 billion per annum in CAT event damages and although wildfires are undoubtedly a major issue, the majority of CAT event damage is water related.
The table below, first shared by the Insurance Bureau of Canada here details Canada’s top 10 insured losses due to severe weather.
Source: 1983-2007: IBC, PCS Canada, Swiss Re, Deloitte. 2008-2021: CatIQ
| Rank | Year | Total loss ($B) | CAT event(s) of note |
| 1 | 2016 | 5.96 | Fort McMurray, Alberta, fire |
| 2 | 2013 | 3.87 | Alberta floods, Greater Toronto Area floods and ice storm |
| 3 | 2022 | 3.4 | Multiple events |
| 4 | 2023 | 3.13 | Okanagan and Shuswap, BC, area wildfires and Nova Scotia flooding |
| 5 | 1998 | 2.83 | Quebec ice storm |
| 6 | 2021 | 2.48 | Calgary hailstorm, British Columbia floods |
| 7 | 2020 | 2.46 | Fort McMurray flood, Calgary hailstorm |
| 8 | 2018 | 2.40 | Multiple events |
| 9 | 2011 | 1.97 | Slave Lake, Alberta, fire and windstorm |
| 10 | 2012 | 1.65 | Calgary rainstorm |
In subsequent articles, we will compare how other countries are faring and whether Canada’s experience is unique or to be expected in today’s rapidly changing world climate.
For more information about CATs in Canada, please contact Scott Schellenberg or Martin Pavelic.
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