With just a quick scan of the news, you’d be forgiven for thinking that unpredictable weather events and natural disasters are becoming more frequent.
Yesterday,
two powerful earthquakes hit California – one of which measured 6.5 on the Richter scale – and just last month, a report funded by the Insurance Bureau warned that Canada is likely to see a major earthquake in the next 50 years,
which could bankrupt insurers.
Learn more about Natural Disaster insurance here.
Climate change warnings continue to come thick and fast – a report released this week warned of a USD$100 billion “protection gap” in the global insurance market as a result of the rising impact of climate-related risks.
Canada is no stranger to extreme weather events. In 2016, the Fort McMurray wildfires eviscerated thousands of homes, and many areas have been hit by severe floods since.
But should insurers be worried about a growing threat from climate change?
“According to Environment Canada, severe weather events that used to happen every 40 years can now be expected every six, and flooding represents 40% of all natural disasters,” Paul Jackson, Vice President Sales, Marketing and Distribution,
Gore Mutual, told
Insurance Business.
In particular, water damage caused by flooding has become a significant concern for Canadian homeowners and tenants, Jackson said, pointing to the “devastating” floods in Alberta and Toronto in 2013.
But insurers are reacting to the developing conditions, he said.
“Climate and seasonal changes, aging infrastructure, urbanization and severe weather events are causing P&C insurers to respond quickly with practical product solutions,” Jackson explained.
Brokers too are beginning to develop new tools to understand their customers better.
“As extreme and unpredictable weather becomes more frequent, customers are looking to their insurance broker to provide good coverage advice based on credible analysis,” he said.
Insurance companies can help brokers to do this by investing in analytics capabilities, according to Jackson.
“Customers are also looking for the reassurance that, should their lives be turned upside down by flood, hail, snow or tornado, their broker is prepared, ready and knows exactly what to do,” he continued.
“Often in crisis situations, customers recognize things don’t get fixed instantly, but they do expect to get clear, reliable, consistent information and a promise that people are working as hard as possible to make things right.”
Related stories:
Major earthquake could bankrupt insurers, Insurance Bureau warns
Warning as Canada faces rising costs of climate change
