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Natural disasters : the first half of 2019 at a huge cost to insurers


Charles Mathieu

16 August 2019 13:30

Photo : Freepik

Claims have increased in Quebec during the first half due to weather events. It is this that has revealed the insurance Bureau of Canada (IBC), which uses data compiled by CatIQ.

The total amount of compensation related to natural disasters and weather events has reached 292 million ($M) in the province. This is an increase of 165 % compared to the first half of 2018. The floods of last spring have cost$ 127 Million, while the abundant precipitation, strong winds and melting snow have caused damage estimated at$165 Million.

Claims relating to these events have increased 63 % in the first half of 2019 when compared to the same period last year. “In order to meet the demand in the face of this volume is unusual, several companies have resorted to the exceptional measure permitted by the Autorité des marchés financiers allowing, under certain conditions, to claims adjusters and out-of-province or retired to come to the aid of Quebec insurers,” says the IBC.

The report, weathering the storm, published last January by the Center Intact adaptation to the climate of theUniversity of Waterloo, shows that the insured losses increase significantly since 1980.

“Due to climate change, events of extreme weather are becoming more frequent and the insurance industry mobilizes to cope with it. The insurance Bureau of Canada continues its information campaigns and prevention measures to help citizens better understand the risks to be able to manage them, ” says Pierre Babinsky, director of communications and public affairs for Quebec, the insurance Bureau of Canada.

Damage anywhere in the world

According to Aon in its report Global Catastrophe Recap : First Half of 2019, 163 climatic events have occurred on a global scale during the first semester, and 17 of them have cost a billion dollars u.s. or more.

The total economic loss have been valued at 73 billion us dollars (G$ US). Of this amount, 20 billion US dollars have been reimbursed by the insurers.

The insured losses from the first half of 2019 related to natural disasters are higher than the average from 1980 to 2018 ($19 billion US), ” says Aon. However, these are lower than the average of the last ten years, that is$ 36 billion US.

High temperatures

The temperature increase occurred mainly in Europe in the month of June has been a climate event major, according to the reinsurer Swiss Re.

“The extreme heat waves and periods of drought are different than those that we have known in recent years are expected to become more frequent, which will increase the risk of forest fires and agricultural losses. We also expect to rain events was more variable, causing the evaporation and the humidity. The company will need to adapt and prepare for these events growing “, says Martin Bertogg, director of the sector of the disaster at Swiss Re.

The under-developed countries greatly affected

In its semi-annual report, Munich Re argues that the under-developed countries have suffered significant damage during the first 6 months of 2019.

“The disasters in under-developed countries are a cause for concern, because the victims would have virtually no insurance coverage. The cyclone Idai, which hit Mozambique, has been relatively worse for this country than the Tohoku earthquake, the natural disaster the most expensive recorded for Japan in 2011. Almost nothing was insured, so that very few affected people have been able to obtain rapid financial assistance for the loss of their property, ” says Torsten Jeworrek, chairman of reinsurance at Munich Re.

Mr. Jeworrek believes that the insurance industry needs to make partnerships with the governments of under-developed countries and development banks to help countries in need.

Swiss Re assesses the economic losses related to the cyclone Idai to US$ 2 billion and that only 7 % of these damages were covered by private insurance.

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