Intact Financial Corp. estimates that its catastrophe losses due to wildfires and other weather total about $570 million for the third quarter so far. The McDougall Creek wildfire burns on the mountainside above houses in West Kelowna, B.C., Friday, Aug. 18, 2023. THE CANADIAN PRESS/Darryl Dyck
TORONTO – Intact Financial Corp. in a report Thursday estimated that its catastrophe losses due to wildfires and other weather events totalled about $570 million for the third quarter so far.
The property and casualty insurance company said that amounts to about $2.40 per share, but noted the wildfires continue to burn and actual losses may differ from its estimate.
Intact says it will issue an update in early October if its catastrophe losses increase materially by the end of the quarter. The company’s shares ended the day down $3.09, or 1.6 per cent, at $190.50.
Nadja Dreff, head of Canadian Insurance at DBRS Morningstar, said although she expected to see a high estimate of damages from Intact, it does not affect the firm’s estimate for the overall insurance industry.
She said the evacuations in Yellowknife and Kelowna, B.C. earlier this month will drive up the wildfire losses going forward.
“But we also note that it is an ongoing situation,” she said.
This year has seen the worst wildfire season in Canada on record, with thousands of residents displaced from British Columbia and the Northwest Territories in recent weeks.
DBRS Morningstar estimated earlier this month that the insured losses due to wildfire in the third quarter would be between $700 million and $1.5 billion for the Canadian insurance industry, which they called “manageable” for insurers.
Insurance employees across Canada are supporting customers by providing confirmation of coverage and funding for additional living expenses, and are on the ground where possible to offer assistance, said Intact chief executive Charles Brindamour in a statement.
Insurance companies in general plan ahead to protect against unforeseen circumstances, Dreff said.
The industry is prepared and has sufficient resources to deal with ongoing natural disasters, she said.
“In other words, it might be affecting the net income for the next quarter but nothing beyond that.”
Craig Stewart, vice-president of federal affairs with the Insurance Bureau of Canada, said it is not surprising to see Intact disclose that wildfires this summer are having a material impact on its company.
Insurers are looking to the federal government for signals on future climate-related changes, he said.
“The government should prioritize climate adaptation because it is only through concerted investments in defending communities that insurance will remain available and affordable across the country,” said Stewart.
This report by The Canadian Press was first published Aug. 31, 2023.
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