Newspaper article The Canadian Press

Canadian Property Insurer Intact Financial to Take Hit from Recent Disasters

Newspaper article The Canadian Press

Canadian Property Insurer Intact Financial to Take Hit from Recent Disasters

Article excerpt

Recent disasters hit Intact Financial results

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TORONTO - Canadians could be paying more for home insurance as the toll of severe weather on personal property continues to climb, one of the country's largest insurance companies said Monday.

Intact Financial Corp. (TSX:IFC) said it expects to book about $257 million in expenses stemming from the flooding in Alberta and Toronto and the deadly Lac-Megantic train derailment in Quebec.

"The devastation brought on by recent flooding and torrential rain is unprecedented," Intact chief executive Charles Brindamour said in a statement.

"The scope of the damage and destruction that we have witnessed in recent weeks is a stark reminder that we must adapt the protection offered to Canadians to ensure it remains sustainable in light of the greater prevalence and severity of weather events."

Intact spokesman Gilles Gratton said the price of home insurance has increased over the past few years to reflect the impact of climate change.

"The costs of the weather-related damages are increasing steadfastly in Canada," Gratton said.

"The home insurance product was designed, historically, to protect people against fire and theft, and essentially over the last 10 to 15 years what you've seen is the main use of the product is for water-related damages."

Gratton said Intact is considering further price increases, higher deductibles or adding sublimits as possible ways to maintain the profitability of home insurance products.

"We'll have to look at how we can keep offering the protection and make it affordable for consumers," he said.

"So it may mean some continued pricing increase, like we've seen over the last few years."

Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction, said increasingly dense cities, crumbling infrastructure and the changing climate are likely to increase weather-related losses over the coming years.

"We're building more and more and putting more and more into our cities, so when you get something like a heavy rainstorm -- it's going to hurt a little bit more," he said. …

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