The Ferocity of Fiona and Value of Flood Insurance
Hundreds of thousands of people remained without power the weekend after the storm, with officials urging many residents to remain indoors as crews, including members of the Canadian Armed Forces, worked to clear debris as quickly as possible.
Meanwhile, provincial and federal leaders are ensuring that financial relief will be available for those property owners and communities affected.
The wreckage extends from southwestern Newfoundland, to eastern mainland Nova Scotia, Cape Breton, Prince Edward Island, southeastern New Brunswick and the Magdalen Islands in eastern Quebec.
“Residents described the horror of a storm so powerful it swept houses into the sea, uprooted trees like twigs, snapped telephone poles, washed away roads and tossed boats and cars aside as if they were toys,” according to the Globe and Mail article.
While tropical cyclones include storm surges and high winds, they also often include a deluge of heavy rain.
The insurance industry has been discussing increasingly devastating climate change-fueled catastrophes for several years now, including recent findings from a report published by the Swiss Re Institute. Those findings: Insured losses from floods doubled to US$80 million during 2011-2020 as compared to the previous decade and global flood losses reached US$20 billion (approx. CA$26.2 billion) in 2021.
The major drivers? Larger populations, economic growth, and urbanisation have been increasing flood losses for many years, just as climate change and rainfall are emerging as major catalysts over the last decade, according to the report.
Only 18% of global economic losses from flooding were covered by insurance between 2011 and 2021, a time when the losses were US$99 billion, according to the findings. More sophisticated risk mapping and better-quality data have created more advanced modelling and greater accuracy for pricing for flood risk, paving the way for flood insurance that had previously been considered impossible.
This has created opportunities in the realm of flood insurance for the private sector.
“The recent events in Kentucky, Mississippi and Texas are a sad reminder of how devastating floods can be to our lives,” said Keith Wolfe, president of US P&C at Swiss Re. “Despite the private flood insurance market gaining traction over the last few years, too many people are still not covered for flooding, and the majority of those impacted by these events are uninsured, leaving them to pick up the pieces at their own expense.”
