climate risks and its related consequences in high-risk regions. It said, “However, as climate risk increases and severe weather events become more correlated around the world, insurance and reinsurance companies may opt to withdraw property insurance coverage in regions they deem too costly to insure, or they may avoid insuring certain risks altogether”.
According to the research, average yearly weather-related losses in Canada are growing faster than the rest of the globe. According to the media, the climate of Canada is warming at an increased rate. The statement said, “This is consistent with the notion that the warming of Canada’s climate is happening at about twice the rate of the global average, according to scientific evidence provided by the Canadian government”.
The report further detailed the consequences of the warming climate. It noted, “With the increase in temperature comes climate change — changes in rainfall patterns and increased frequency and intensity of extreme weather-related events such as floods, droughts, heat waves, wildfires, and storms and the resulting higher insured losses”. Eventually, these occurrences may make it more difficult to obtain insurance.
Nadja Dreff, senior vice-president, insurance, told the media about the risks in property insurance. She said, “Under an extreme scenario, global reinsurance companies may reduce their appetite for insuring some property risks in Canada, creating additional challenges for primary insurance companies that rely on reinsurance as a risk management strategy”. She added, “As such, we are closely monitoring the consequences of climate change and the P&C insurance industry’s response as part of our credit rating analysis”.
