Canadians identify more readily with concrete language like ‘extreme weather events’ when learning how to prevent natural catastrophe (NatCat) risks, says Aviva Canada’s CEO Tracy Garrad.
“We’ve changed our language a little,” she told Canadian Underwriter during the company’s full-year 2024 earnings call Thursday. She was responding to a CU question about how the P&C insurance industry can advocate for climate resilience measures in a world in which economic risk seems to have taken a front seat in the headlines — even after Canada’s worst year ever for natural catastrophe losses.
“We’re talking about the impact of extreme weather events, and I’ll put in brackets ‘caused by climate change,’ but we don’t need to say that [to customers],” she said. “I think [what’s] resonating with customers very readily is ‘extreme weather events.’ They’re impacting [customers’] homes and they’re impacting their vehicles. In the Calgary hailstorm [last year], some of the biggest losses were the vehicle losses.”
Last year, Canada’s property and casualty insurance industry paid out more than $8.5 billion for natural catastrophe insurance claims related to extreme weather events. That’s based on more than 273,000 NatCat claims in 2024, with the vast majority of those arising from four major losses in a month – flooding in Ontario and Quebec, a wildfire in Jasper, Alta., and a record-setting hailstorm in Calgary.
Aviva Canada’s undiscounted combined operating ratio of 98.5% for 2024 reflected the large NatCat losses to which the company responded in 2024 Q3 — about four points lower than the long-term average, Aviva plc noted.
“Our loss impacts [from the Canadian NatCats] are in line with our market share in the affected areas,” Aviva plc’s chief financial officer, Charlotte Jones, said in a video clip Thursday, during her presentation about Aviva plc’s overall results.
She noted Aviva Canada’s premiums were up 11% in personal and commercial lines in 2024 based partly on price increases, including double-digit price increases in auto lines, as well as the release of prior year reserve funds. But the NatCat losses did mean Aviva’s combined operating profit dipped to £288 million (about $523 million Cdn) in 2024.
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Garrad said Canada’s P&C industry, including Aviva Canada, is advocating for infrastructure improvements to combat the damage caused by extreme weather events.
“We will continue to play a really active role in advocating for [public] investment in resilient infrastructure, because whilst we are there as an insurer to pick up the pieces when it goes horribly wrong, it’s actually better for everybody if you can put in prevention measures in the first place,” she said.
Garrad noted the P&C industry is already doing a lot of consumer education around preventing severe weather damage.
Aviva Canada is working with Institute for Catastrophic Loss Reduction working groups to educate homeowners on how to prevent severe weather losses, Garrad said. Also, the company remains engaged with provincial and federal ministries on disaster preparedness and related initiatives.
And Aviva’s Canada’s managing director of personal lines Susan Penwarden is chairing the Insurance Bureau of Canada’s working group on the federal government’s national flood insurance program.
But there’s only so much the P&C industry can do by itself, as Garrad noted.
“I think we’re absolutely playing our part, but we’ve got to also see governments take action on public policy,” she told CU. “It’s no longer an unforeseen, insurable event if you build the house back onto the site that has been flooded three times already.
“We really have to have some decision-making and leadership that seeks to get some of those public policy terms shifted for the future. Because otherwise, we risk putting Canada in a situation — like some people in Florida and California have now found — where it’s not about the affordability of the insurance anymore. It’s about access in the first place.
“And that’s not what we all want to happen. We are absolutely committed: Canadians can count on us to meet this moment with action and to be proactive in talking about it, giving our expertise, and lobbying to try and get the right decisions made.”
Feature image courtesy of iStock.com/iiievgeniy
