Where 2023 Cat losses stand after summer storms

Summer storms in Alberta and the Prairies caused more than $300 million in insured losses, bringing the cumulative total of Cat losses to date in Canada to more than $2 billion — with another financial quarter to go in 2023.

“At this time, I can tell you that we are firmly and well above $2 billion [in Cat losses for 2023], and that we are at a record-setting number of catastrophes for the year,” Laura Twidle, president and CEO of Catastrophe Indices and Quantification Inc. (CatIQ), tells Canadian Underwriter.

Last year, Canada’s property and casualty insurance industry paid out more than $3.1 billion in claims due to weather-driven natural catastrophes.

Unofficially, Canada has seen 20 to 21 catastrophes already this year, one claims industry source tells CU, breaking last year’s record of 15 for all of 2022. Catastrophes are claims events that cause more than $30 million in insured losses.

These numbers will no doubt increase as insurers tally claims rolling in from damage caused by Hurricane Lee, which made landfall in New Brunswick and Nova Scotia last weekend.

Related: How Canada’s insured cat losses stack up globally

In western Canada, several storms hit Alberta and the Prairies over the past few months, totalling more than $300 million in insured losses, according to CatIQ.

“Of the more than $300 million in insured losses, over $90 million – or 30% – went toward replacing or repairing storm-damaged vehicles in Alberta,” the Insurance Bureau of Canada observed Tuesday. “Since 2020, insured losses to vehicles in Alberta from severe weather exceeds $500 million.”

IBC says vehicle damage arising from NatCats is “particularly straining Alberta’s auto insurance market, given the provincial rate pause.”

Alberta has paused auto insurance rate increases until at least the end of this year, meaning insurance companies are not allowed to raise auto insurance rates even if their claims costs escalate. Some insurers have commented publicly that one option is to move business elsewhere in Canada so as to remain profitable. Meanwhile, the industry and the province continue to hold discussions on the topic.

As well, personal and commercial property lines will be stressed because of the record frequency of Cats in 2023, sources tell CU.

The insured Cat losses in the summer storms in western Canada were due to storm damage from wind, rain, and hail. The $300 million total does not include insured losses from the ongoing wildfires, IBC said.

“This is the third straight summer in which Alberta has seen significant insured damage from hail, wind and rain,” said Aaron Sutherland, vice president of IBC’s Pacific and Western regions.

The four summer storms causing the most damage include:

 

Calgary Hailstorm

July 15, 2023

$110+ million in insured damage

 

Alberta and Saskatchewan Canada Day Storms

July 1, 2023

$100+ million in insured damage

 

Central Alberta Flooding

June 18–20, 2023

$40+ million in insured damage

 

Prairie Severe Storms

July 24–26, 2023

$40+ million in insured damage

 

Feature image courtesy of iStock.com/amriphoto