Following last week’s extensive flooding in the Greater Toronto Area, the resulting flood claims are expected to be manageable for the industry despite the losses being significant for a single event.
Credit ratings agency Morningstar DBRS noted: “While no official damage loss numbers have been reported, we believe that it is comparable to the 2013 Toronto flood, which caused around $1 billion in insured losses.
“The insured losses, while large for a single weather event, are manageable for the insurance industry. We foresee no direct credit rating implications arising from the Toronto July 2024 floods.”
The floods were due to heavy rainfall from the remnants of Hurricane Beryl, which became the earliest Category 5 hurricane recorded in the Atlantic on July 1.
Morningstar DBRS assistant vice president for North American insurance ratings Steve Liu, meanwhile, highlighted a positive trend for the sector.
“In recent years, we note that the optional flood insurance has become more popular, especially with extreme weather events becoming more frequent,” he said.
The Financial Services Regulatory Authority of Ontario (FSRA) has also announced measures designed to help insurers in the province process the claims volume.
“FSRA wants to help ensure that consumers’ claims are adjusted and processed quickly,” the regulator stated. “The temporary measures will allow Ontario insurers to use the services of employees of affiliated insurers [and] allow licensed adjusting firms to use claims adjusters with licences outside of Ontario.
“These measures will be in effect until October 31, 2024. Insurers and adjusting firms who wish to use these temporary measures must contact FSRA to confirm the requirements of the temporary measures before proceeding.”
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