Insurance industry needs to evolve to handle greater risks

life insurance industry canada

Canada’s insurers, and other parties, will have to adapt to the growing frequency of natural disasters

Severe weather is beginning to have a major impact on Canada’s insurance industry. As powerful storms hit populated areas, claims are beginning to apply significant financial pressure on insurance companies offer coverage for property and vehicles. The Insurance Bureau of Canada believes that the time has come to address the rising costs associated with severe weather. Doing so may help mitigate the costs that consumers see and help the insurance industry become more resilient against future disasters.

Increasingly common storms will place more financial pressure on insurers

According to Heather Mack, the Insurance Bureau of Canada’s director of government relations, it is time for the insurance industry to adapt to the reality that severe weather is becoming more common. Mack notes that powerful storms are no longer freak events, but will occur with higher frequency in the future. Alberta, in particular, has been hit by many power storms in recent years, which have left a major financial impact on the province and the insurance industry as a whole.

Insurance industry must adapt in order to handle major disasters

life insurance industry canadaThe insurance industry is not the only thing that will have to adapt to increasingly frequent natural disasters, of course. The insurance Bureau of Canada notes that properties will have to be built stronger and that Canada’s infrastructure will need to be re-considered in order to make it more resilient against powerful storms in the future. Strong buildings will help prevent property damage, while better infrastructure will protect establish energy grids against natural disasters that can cause power outages.

Floods have proven to be some of the most costly disasters that insurers face

In 2013, a major flood in Alberta caused some $1.8 billion in insured losses, but the Alberta government suggests that the disaster caused as much as $6 billion in damage throughout the province. Floods are some of the most disastrous events that the insurance industry has to deal with. These disasters can cause significant financial losses and insurers will have to find new ways to mitigate risks and become capable of handling these disasters as they become more frequent.

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