NatCat claims for 2025 reach the $1.6-billion mark

Canada’s property and casualty (P&C) insurance industry has paid out $1.6 billion for natural catastrophe (NatCat) damage so far this year, Insurance Bureau of Canada (IBC) says.

That would put the industry on pace for a $2.7-billion NatCat year in 2025, barring a major catastrophe between now and the end of December.

It’s a far cry from the $9.1 billion the industry paid out in a record-setting season last year. But it does suggest that $3 billion in annual NatCat losses is becoming the ‘new normal’ for the industry.

During Canada’s record wildfire season in 2023, P&C insurers paid out $3.1 billion in claims.

Last year’s record included flooding in Quebec from the remnants of Hurricane Debby, for which the P&C insurance industry paid out more than $2.5 billion in claims. That storm saw more than 70,000 claims opened in fewer than three weeks.

This year, severe flash flooding occurred in Montreal and other parts of Quebec between July 13 – 14, causing nearly $120 million in insured damage, according to initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ). Up to 100 millimetres of rain fell on the Montreal area on Sunday, leading to flash flooding and power outages.

Why innovative customer experience will define the future of personal auto insurance Image

Insights Paid Content

Why innovative customer experience will define the future of personal auto insurance

Technology is helping insurers reimagine how they support personal auto customers — and it starts the moment a collision is reported, say experts at Accident Support Services International.

By 

Sponsor Image

Also in the news: Insurers report good first-half results, but wildfires remain top of mind

“After each disaster, insurers are on the ground to support their customers throughout the rebuilding and recovery process,” says Laurent Fafard, vice president of the Quebec region at IBC. “However, these extreme weather events serve as a reminder of the need to adapt collectively and make our communities more resilient.”

IBC has some ideas on that.

“As weather-related risks continue to intensify year after year, governments across Canada have a critical role to play in better protecting Canadians from natural disasters,” IBC says.

Specifically, insurers are calling on Canadian governments to:

• halt the construction of unprotected homes and businesses in high-risk flood and wildfire zones
• Invest in vulnerable communities to ensure they are FireSmart and better protected against flooding
• Help homeowners understand the specific risks they face in their areas
• Subsidize home retrofits to help reduce exposure to floods and wildfires.

“Canada also needs a federal coordinating agency to guide emergency preparedness and recovery,” IBC says. “Every other G7 country has an agency operating in this capacity. It’s time for Canada to follow suit and take a proactive approach to emergency management.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.