A new whitepaper from Reuters Events, United in the storm: How Canadian insurers are aligning on climate adaptation, calls on stakeholders – the industry and government alike – to align and share expertise and resources dedicated to understanding and mitigating weather and climate-related losses.
“Discussions around emission reduction have been fairly contentious in this country. They’ve sucked all the oxygen out of the room, and as a result, adaptation has been very much an afterthought,” says Craig Stewart, vice president of climate change and federal issues at the Insurance Bureau of Canada (IBC).
The sentiment echoes another whitepaper recently published by the Fraser Institute.
According to the Reuters whitepaper, meanwhile, 80 per cent of Canadian cities are located on floodplains, making flooding the country’s number one natural disaster. “Damages caused by flood account for 75 per cent of all weather-related insurance payments in Canada,” they write. Altogether, the nation’s insurers paid out $8.5-billion in weather-related property losses from floods, hail and fire in 2024.
As of now, they add, an estimated 10 per cent of Canadian homes are considered uninsurable for flooding. In other respects, many insurers are also making home hardening strategies (roof upgrades, defensible space and water shutoff devices) mandatory for accessing favourable terms.
The whitepaper goes on to say that the government’s rhetoric that climate change is a whole of society problem is no exaggeration.
“We’ve got a line of sight to the risk in a way that almost no one else does,” Stewart is quoted as saying. They add that municipal, provincial and federal governments ultimately need to invest more to protect Canadians and improve recovery efforts. The IBC is calling for a national summit of stakeholders to be convened.
Sharing proprietary data
Companies like Co-operators, meanwhile, are sharing their proprietary data with organizations like the Canadian Climate Institute, in an effort to help effect change. “We feel very strongly that we risk a future where insurance will become unaffordable for Canadians. We already see this happening in some markets,” says Tara Laidman, vice president of home and auto insurance with the Co-operators.
The paper adds that for every Canadian dollar spent on adaptation, $13 to $15 will be returned in the years to come in direct and indirect savings and benefits.
“Insurers have a leading role to play in informing Canadians about their risk, but also ensuring the country is prepared to recover. Crucially the industry can be an essential partner in helping governments understand where the risk is and what the priorities should be,” they write. “Although a competitive market should be able to address many risks, given the nature of climate catastrophes, insurers also need government.”
