The large number of severe storms have been taking their toll on insurers across the country.
A growing number of signs of uncertainty have been popping up in the insurance industry in Canada following the storms that have been striking various areas causing flooding, hail, winds, and other damaging weather events.
This was topped off when one of the major banks in the country came out with one of its own early warning signs.
Only weeks after the province of Alberta was struck with historic flooding, during which time the insurance industry watched various parts of Ontario – including most of Toronto, the largest city in the country – receive record breaking levels of rainfall within very condensed periods of time, TD Bank made an announcement that its insurance arm was expected to lose nearly $290 million from May through July of this year.
These disasters are making a tremendous impact on the insurance industry, that had expected a profit.
If TD had not had to deal with the repercussions of the severe weather, it expects that it would have made $180 million in profit. This same scenario is occurring throughout the insurance industry in Canada. The disastrous weather has cost that one insurer an estimated $470 million.
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These insurance industry figures are notably different from those generated in 2012, at which time the May to July period brought in $400 million in profits. According to the CEO of TD Bank, Edmund Clark, in a recent speech, “We expect good premium growth in insurance, even with slowing creditor insurance but businesses face increased uncertainty.”
TD Bank is far from alone in this experience within the insurance industry. Other companies are also facing comparable losses. For example, the largest property insurer in the country, Intact Financial, revealed that its own profits shrunk by 32 percent as a direct result of claims due to storm damage.
A spokesperson from the Insurance Bureau of Canada (IBC), Stephen Kee, explained that “Insurers are a bit like the canary in the coal mine, and we’ve talked a lot about adaptation strategies.” At the same time, consumers are now left wondering if this insurance industry strategy will involve techniques to help to ensure that coverage will remain affordable and complete for them.