Insured Losses from Catastrophic Events Reached $4.9 Billion in 2016

Updated:

August 28, 2019

In insurance, a catastrophic event is one that is typically unpredictable and causes extreme loss. Catastrophic events can be either natural or man-made disasters, and common examples include earthquakes, floods, hurricanes, wildfires, and terrorist attacks.

According to a review conducted by Property Claim Services (PCS), insured losses from catastrophic events in Canada reached about $4.9 billion last year, which is nearly 10 times more severe than 2015.

When these events occur, they have a heavy impact on the market - often driving up premiums.

The report - "More than 50 Cats: PCS Full-Year 2016 Catastrophe Review" - also found that, over the past five years, the average insured loss from a catastrophic event was $2.1 billion. During this time frame, the two largest events on record in Canada were the 2014 Alberta floods ($1.7 billion) and last year's Fort McMurray wildfires ($4 billion).

Six of the 2016 catastrophic events that occurred in Canada were in the "wind and thunderstorm" family and resulted in industry losses of nearly $860 million.

Furthermore, the report noted that the increase in catastrophic events had an impact on reported personal losses. In 2015, a quiet year for catastrophic losses, personal losses accounted for only 45 per cent of the insured loss estimate. In 2016, personal losses accounted for 71 per cent of the insured loss estimate.

Moving forward, there is a possibility that major, catastrophic events will increase in frequency and severity, making it all the more important for insurers and businesses to stay ahead of the game. In 2017, many insurance companies will be looking to advance their tools and share best practices for assessing and responding to catastrophic disasters, whether natural or man-made.

For more information on the market forces impacting insurance premiums contact our Commercial Insurance team today.

FAQs

What is financial advising?

Financial advising involves providing guidance and advice to individuals, families, or businesses to help them make informed decisions about their financial matters. This can include various aspects such as investment planning, retirement planning, tax planning, estate planning, and more. Financial advisors analyze their clients' financial situations, goals, and risk tolerance to create customized strategies that align with their objectives.

Why is financial planning important?

Financial planning is crucial for several reasons:

Goal Achievement: It helps individuals set and achieve financial goals, whether they are short-term, such as buying a home, or long-term, like funding a comfortable retirement.

Risk Management: Financial planning addresses risks by considering insurance, emergency funds, and other protective measures.

Budgeting and Saving: It promotes responsible money management through budgeting and saving, fostering financial stability.

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Can financial advisors help with debt?

Yes, financial advisors can help with debt management. They can assess your overall financial situation, create a budget, and develop strategies to pay down debt efficiently. They may also negotiate with creditors on your behalf, provide debt consolidation recommendations, and offer guidance on prioritizing and managing debt repayment.

What exactly does a financial advisor do?

The specific responsibilities of a financial advisor can vary, but generally, they:

Conduct a thorough analysis of a client's financial situation, including income, expenses, assets, and liabilities.
Develop personalized financial plans based on the client's goals, risk tolerance, and time horizon.
Provide investment advice and portfolio management services.
Offer guidance on retirement planning, estate planning, tax planning, and insurance.
Monitor and adjust financial plans as needed based on changes in the client's life or market conditions.
Educate clients on financial matters and empower them to make informed decisions.

What is the average fee for a financial advisor?

The fees charged by financial advisors can vary widely based on factors such as the advisor's experience, the services provided, and the region.

Common fee structures include:

Hourly Fees: Advisors charge an hourly rate for their services.
Flat or Fixed Fees: A set fee is charged for specific services or a comprehensive financial plan.
Asset-based Fees: Fees are a percentage of the assets under management (AUM).
Commission-based Fees: Advisors earn commissions on financial products they sell.
Combination of Fees: Advisors may use a combination of the above fee structures.
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It's important to discuss and clarify fee arrangements with a potential financial advisor before engaging in their services.