A new report by the Centre for International Governance Innovation (CIGI) claims that climate change will erode the conditions necessary for property insurance to remain available and affordable in many areas across Canada.
The report, written by CIGI fellow Jason Thistlethwaite, says that uncertainty combined with inadequate investment and coordination in Canada’s disaster management systems increase the exposure of the insurance industry to climate change and the potential for decreases in availability and affordability.
The report goes on to say that property insurance markets in Canada are not sustainable without coordinated efforts between all levels of government to increase investments in hazard and climate change risk mitigation; assess and identify areas where the socio-economic implications of insurance shortages will be disproportionate; and improve awareness about the division of responsibility for hazard risk mitigation between insurers, property owners and governments.
“Canadian communities are not adequately prepared for existing and future hazards generated by climate change”
According to the report, a key component of reducing such vulnerability is ensuring that property insurance remains available and affordable. This challenge has yet to be formally addressed by Canadian decision makers at all levels of government”.
Recent Floods in Canada
Alberta, Canada, suffered major flooding in June 2013, with losses of around $4 billion. Floods struck a year later in June 2014 in Alberta, Manitoba and Saskatchewan, lasting several weeks.
CIGI is an independent, non-partisan think tank focused on international governance. Led by experienced practitioners and distinguished academics, CIGI supports research, forms networks, advances policy debate and generates ideas for multilateral governance improvements. See the full CIGI report “Canada’s Coming Property Insurance Crisis” here (PDF).