Can insurers leverage clients to reduce NatCat losses?

Carriers may reap rewards by educating current and future homeowners about NatCat risks, Graham Haigh, senior vice president and special insurance advisor at Wawanesa Mutual Insurance tells Canadian Underwriter.

“Look at increasingly severe weather events driven by climate change. We have got to address it, but not just by being a risk transfer vehicle. We have to build resiliency into the communities we insure, live and work in,” he says. “That is where the insurance industry has to pivot and spend a lot more time and money.

“It’ll be better for all of us if we’re able to deal with resiliency in advance of having to cover the resulting loss payments.”

Haigh, who will retire from Wawanesa at the end of June, says P&C insurers are all too familiar with the pitfalls of using cheaper roof shingles or siding materials that can’t withstand hail or the temperature extremes of a Canadian winter. It’s a message that’s still making its way down to customers.

“We have to support [good] decisions but also push into things like building codes and municipal, provincial and federal government responsibility around making sure that we’re delivering for our citizens,” he says.  

NatCat school

One potential tool for public education is the Institute for Catastrophic Loss Reduction’s Climate Resilience Centre. “We should be pulling in high school students to come see what’s going on,” he says. “You can look at some of the homes that have survived, whether it be flooding or wildfire, in the neighbourhoods.”

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Apt lessons in the face of wildfires now threatening Manitoba, since many cases detailed at the Climate Resilience Centre detail how structure survivability often comes down to owners’ actions to target the margins of their properties.

“Much like financial professionals who are responsible for [people’s] investments, we have a similar job [to meet] our fiduciary responsibilities to [clients’] risk side. I’d rather invest in education than have the conversation with clients at the end of a large, catastrophic loss event, when you’re then having to upend their lives and move them into temporary accommodation,” Haigh tells CU.

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Further, existing coverage gaps need to be addressed. The worst outcome for clients is if insurance companies cease to cover particular exposures.

“If we start exiting wildfire zones, if we start exiting hail areas, if we stop insuring people that have any exposure to overland water, we become irrelevant,” he says.

“We need to help people better understand and mitigate risk. Does a roof built to survive a hailstorm look as attractive as another roof that isn’t? Maybe not, but it’s the right thing to do. We have to help people make appropriate choices on resiliency. It’s more expensive up front, but less expensive over time.”

Building back

Going forward, he says, P&C insurers should look carefully at how to proceed with building or rebuilding.

“I recently used AI — because I didn’t want to use real names — to create names for towns that show they’re exposed to loss events,” Haigh tells CU.

“Whether [the AI] comes up with Flood Plain or Hail Ridge or Wildfire Valley or Quakeville, there are definitely places [whose] names will say, ‘Something clearly has happened here over time.’ Those are where you look first. Yes, we have modelling but there’s [also] that ‘duh factor’ where you clearly know places are exposed to loss.”

To help home buyers planning purchases in some of those areas, he adds, title documents should describe the risks the buyers will be taking on.

“I don’t believe consumers are well-educated and looking for that. They look at the individual house [to see if] it’s in good shape. But what they’re not watching for is, ‘What is the historical exposure that I’ve got by buying a property in this area?’ If you’re buying something in Hail Ridge, [you need] to look at your requirements around roofing and siding, and where [you’ll] put your car. Those are things [about which] we need to better inform and educate consumers,” says Haigh.

This article is excerpted from one appearing in the April-May 2025 print edition of Canadian Underwriter.

Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.