“The more losses, the more of these events, the higher the risk and the higher insurance premiums will trend,” said Craig Stewart, vice-president of climate change and federal issues at the Insurance Bureau of Canada.
“However, the wildfire season is not yet over and there is the potential for any of the fires to intensify and further pressure Q3 2023 results, especially if the fires affect densely populated regions, economic hubs, or key infrastructure. Larger and more frequent weather-related losses will continue to pressure property insurance prices higher in the near term,” they said.
“We're seeing this right now in Kelowna, with the fires in Northwest Territories. When you have a wildfire event, you have catastrophic loss of the home,” she said. No single event drives insurance premiums up, but overall trends do, said Stewart. Insurers price risk, and the risk of major weather events is rising, he said.
Those U.S. insurers left markets in part because state regulations prevented them from passing on the higher costs of increased risk, noted Stewart, making such a move less likely in Canada.