Insured losses have surpassed C$110 mn following severe storms and flooding in southern British Columbia, as reported by Catastrophe Indices and Quantification Inc. (CatIQ).
Overflowing rivers, backed-up sewers, and flooding in basements, roads, and parking garages caused significant property damage in areas such as North Vancouver, West Vancouver, Metro Vancouver, Surrey, Coquitlam, and Burnaby.
The flooding resulted from a Category 4 atmospheric river—characterized by high water vapor transport and duration—that brought intense rainfall and strong winds between Oct. 18 and Oct. 20, according to CatIQ.
IBC highlighted that between 2001 and 2010, insurers averaged annual severe weather payouts of C$701 mn. The majority of this year’s losses, C$7.12 bn, resulted from four major events, including historic rain and flooding in Toronto and Montreal, as well as wildfire and hail in Alberta.
The Insurance Bureau of Canada (IBC) noted that this storm adds to a record-breaking year for catastrophe losses. Insured losses from severe weather in Canada now frequently exceed C$3 bn annually and have already reached C$7.7 bn in 2024.
The bureau renewed its call for full funding of a National Flood Insurance Program, advocating for a cost-effective strategy to address such losses. IBC’s Climate Change Advocacy National Director, Jason Clark, emphasized the need for immediate action, urging collaboration between governments and the private sector to mitigate risks and enhance community protection.
In August 2024, the remnants of Hurricane Debby brought record-breaking floods to Quebec, inundating 55 communities. Just a month before, nearly 10 centimetres of rain fell in Toronto in three hours, overwhelming the city’s infrastructure and flooding many homes and businesses.
And in November 2021, an atmospheric river unleashed record-breaking rain in British Columbia, triggering landslides and floods that caused extensive damage, cutting off main access routes to several areas of the province, severely impairing the economy.
As climate change worsens, Canadians will experience a significant increase in the frequency and intensity of these kinds of flood events. Warmer air, caused by increasing concentrations of heat-trapping gases in the atmosphere, holds more moisture, leading to heavier rainfall and more intense storms.
Floods can severely damage homes and infrastructure, costing billions of dollars
- Flooding is the most common and costly disaster in Canada. In the past decade, floods have averaged nearly $800 mn in insured losses annually.
- Insurers estimate that for every dollar in insured losses from flooding, there are two dollars in uninsured damage that are borne directly by households and taxpayers.
- Over 1.5 mn homes across the country are located in areas of high flood risk. Eighty per cent of Canadian cities are built, in whole or in part, on floodplains.
- As extreme rainfall and coastal flooding increase, the annual costs of flood damage to homes and buildings in Canada could grow three to five times by mid-century—amounting to over $5.5 bn—and reach as high as $13.6 bn by the end of the century.
- On July 16, 2024, in Toronto, nearly 10 centimetres of rain fell in three hours, leading to massive flooding across the city. Early estimates put the cost of this flooding at $1 bn in insurable losses, with the total costs likely several times higher.
- Canada has experienced five billion-dollar-plus flood events since 2011.
- Many Canadian homeowners believe they have insurance that will pay for repairs and rebuilding after overland flooding, but only about 10 to 15 per cent of households are actually covered.
- The households facing the highest flood risk in Canada either can’t get flood insurance or can’t afford it because the rates are so high.
This, combined with melting snow packs, rising sea levels, and changing weather patterns, has created the conditions for more severe and unpredictable flooding. These floods are devastating for communities, economies, and livelihoods.
AM Best is holding a stable outlook on Canada’s P&C insurance industry, despite notable challenges from catastrophic events in 2023 and 2024.
While catastrophe activity remained manageable in the first half of 2024, Canada’s P&C insurers faced four significant events in the third quarter, potentially marking another record year for losses.
Catastrophe losses in 2023 reached an estimated CAD 3.1 bn, ranking among the five worst catastrophe years on record, trailing only inflation-adjusted losses in 2013 and 2016.
Canada’s P&C industry saw net income rise by 77.5%, from CAD 4 bn in 2022 to CAD 7.1 bn in 2023. Growth in underwriting income and a rebound in investment income fueled profitability, though rising expenses partially offset these gains.
