Monday, April 11, 2016

What? In the Globe & Mail?

In today's G&M, the CEO of the Insurance Bureau of Canada, Don Forgeron, asks why our federal government is doing next to nothing to prepare the country for severe climate change impacts.  Good question.

The numbers are harrowing: The PBO predicts that storms, hurricanes and floods linked to climate change will cost the federal disaster fund $900-million annually over the coming five years. That compares to an average of just $54-million a year (in adjusted 2014 dollars) for the period between 1970 and 1994.

That $900-million-a-year estimate is well in excess of what the federal government has currently set aside to deal with such events.

Floods are expected to cause the bulk of the damage, largely as a result of multiple-day rainfalls across the Prairies and Rockies. The Insurance Bureau of Canada (IBC) recently mapped the flood risk to people across the country and found that 19 per cent of Canadian households are at some level of risk.

And yet Canada is the only Group of Seven country without a national flood program. Many people in high-risk areas find it difficult or impossible to purchase flood insurance. As a country, we therefore remain exposed to the safety challenges and financial costs that will invariably accompany severe weather threats.

It seems Mr. Forgeron didn't get the memo that Canada is a petro-state, the sort of nation that pays lip service to climate change but very little else just in case people might begin asking inconvenient questions such as why we're hell bent on pushing high-carbon bitumen onto world markets. Who needs that hassle? Now, nothing to see here, move along.


Matthew Day said...

lol, thinking about how one might have a 'national flood program' when national can as easily be pronounced continental. How about this for a program? Provinces are responsible for their own Provinces. People that build on a flood plain, lose their building when it floods. Insurance companies pay out their policy holders when the insured risk happens. Funny how Insurers are so very eager that somebody else needs to fund disasters.

The Mound of Sound said...

It's been interesting to follow how the giant re-insurers such as Munich Re are coming to view climate change. They are looking at a number of worsening risks for which they and primary insurers may before long be unwilling to write policies.

After Hurricane Sandy who wants to cover the Jersey shore? It's been a worse situation in southern Florida where new claims for storm damage were submitted before the previous storm's damage had even been repaired.

The American Congress introduced flood insurance for the mainly flood-prone south but eventually thought it should be self-financing. When that reality sank in it cause a massive drop in property values and the furor drove Congress to drop the break even idea. In other words those socialism-hatin' rednecks can still get their generously taxpayer subsidized flood insurance on the cheap.

When losses become routine they're no longer legitimately insurable.