Insurance In The Era Of Climate Change

Starting in the 2000s, the Actuaries Climate Index began to trend upward in Canada, reflecting the increasing probability of extreme weather events.¹ More recently, a single event resulted in massive insurance claims. The 2016 fires in Fort McMurray caused nearly $10 billion in damage, a third of which was insured. It was the country's biggest ever payout.²

In all but two years between 1983 and 2008, annual losses resulting from natural disasters covered by homeowners' policies remained under $500 million. Since 2010, Canadian insurers have generally paid out over $1 billion a year.³ The main cause of this sizeable increase? Water. Heavy rainfall and rising sea levels result in water damage that threatens many at-risk buildings. Another big reason for this sharp increase is aging infrastructure.⁴