Insured losses from severe weather events across Canada in 2024 totalled $8.5 billion, Catastrophe Indices and Quantification Inc. (CatIQ) reported Monday.
“The insured loss figure of $8.5 billion makes 2024 the largest loss year for the country on record, far exceeding the previous record of $6.2 billion recorded in 2016,” CatIQ says in a press release. In 2016, the country experienced the Fort McMurray wildfire, the costliest Cat on record at about $4 billion in insured losses.
Two-thirds of the losses last year were related to personal property, CatIQ president and CEO Laura Twidle tells Canadian Underwriter Monday.
In addition to the unprecedented losses last year, the number of total Cat claims exceeded 273,000, far in excess of the previous record of 197,000 in 2016. In less than a month in the summer, Canada recorded four new Top 10 costliest events:
Two of the four major events were flooding (Debby and Ontario flooding), so flooding was more impactful in 2024, Twidle says. Plus, smaller flooding events happened throughout the year, including remnants of Hurricane Beryl, flooding in Ontario in August, and southern B.C. flooding in October.
CatIQ considers catastrophes as events that generate insured losses of more than $30 million. While the number of Cats in 2024 was on par with the annual average at 12, four events generated losses of $1 billion or more, making 2024 a record-breaking year.
2024 losses nearly triple last year total
The 2024 total is nearly triple the total insured losses recorded in 2023 and 12 times the annual average of $701 million in the decade between 2001 and 2010, Insurance Bureau of Canada (IBC) adds in a release.
“The Canadian insurance industry has experienced back-to-back challenging years after a record-shattering number of catastrophes (24) in 2023, and four events, which combined, exceeded $7.5 billion in just 27 days in 2024,” Twidle says in CatIQ’s release. “There is a clear need for continued collaboration to address the growing scale and frequency of catastrophe events across Canada but, more importantly, concerted action to mitigate the impacts of these events.”
Jason Clark, national director of climate change advocacy at Insurance Bureau of Canada (IBC), agrees. “It is increasingly worrying when we see that the trend line continues to go up in terms of the frequency, severity and cost of these events,” he says in an interview.
Last year’s severe weather events affected hundreds and thousands of Canadians and will continue to put pressure on home insurance premiums, which are disproportionately affected, Clark says. “What we’ve seen is, since 2019, Canada’s already experienced a 115% increase in the number of claims from personal property damage and a 485% increase in the cost for repairing or replacing personal property.
“When you pair that with the increasing risk we are seeing across the country, this is having a negative impact, broadly speaking, on premiums…,” Clark says. Since premiums are individualized, it’s difficult to say how much premiums could increase for homeowners specifically. Factors such as land use planning, plus specific infrastructure decisions that range from one community to the next, can also play a role, Clark says.
Flood insurance program in peril
Initiatives such as the National Flood Insurance Program for high-risk households will help mitigate losses. But Prime Minister Justin Trudeau’s resignation last week and prorogation of Parliament until Mar. 24 will delay timelines for the program, which insurers hoped to be in place this year.
“We always knew that that was a possibility, but it does very much challenge what the current government committed [to] in the federal 2024 budget; [that is,] to deliver a national flood insurance program in the next 12 months,” Clark says. “That looks highly unlikely.
“Our hope is that whether we do see a Budget 2025 or Canadians heading to the polls, these [climate] issues are so fundamental to the safety and security of households and communities that the future federal government is going to take these exceptionally seriously.”
Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction, says the entire country, and virtually every community of any size, is at risk of hazards heightened by a warming climate. In 2024, there were substantial losses in three of Canada’s largest cities — Toronto, Montreal and Calgary — plus the wildfire in Jasper.
“We need to get on with the job of building resilience into systems, infrastructure, businesses and individual properties,” McGillivray says. “We need to do a better job of identifying where the risk is, we need to better fund the National Adaptation Strategy, we need to develop new and better codes and standards, and we need to figure out and fix the problem of people not responding to incentive programs like municipal basement flood incentives and FireSmart incentives.
“We aren’t moving fast enough with adapting to the changing climate. And where we are doing things, we aren’t doing nearly enough,” he says. “The $8.5 billion was a shot across the bow, but we ain’t seen nothing yet.”
Feature image: City crews clean up debris on Lake Shore Blvd., after heavy rain caused flooding, in Toronto on Tuesday, July 16, 2024. THE CANADIAN PRESS/Christopher Katsarov
