Prepare for Disasters and Severe Weather

(Mazdak Moini, VP Commercial Lines & Reinsurance Aviva Canada Inc.)

Aviva Canada, one of the country’s leading property and casualty insurers, is honored to serve over three million customers across Canada and actively support the communities where we work and live.

As one of the leading insurers, we see the devastating impact of severe weather and natural disasters firsthand. According to the Insurance Bureau of Canada’s 2015 Fact Book (page 16), for the past six consecutive years, insured losses caused by large natural catastrophes have been around or over $1 billion. By comparison, insured losses averaged $400 million a year over the 25-year period from 1983 to 2008.

We are committed to preventing damage before it occurs and helping Canadians prepare for unforeseen weather events and natural disasters. That’s why we launched Plan & Protect, a free emergency preparedness app, in partnership with the Institute forCatastrophic Loss Reduction (ICLR).

The app is available to all Canadians, and for every download, we’re donating $5 to the Canadian Red Cross to help communities affected by disasters*

Plan & Protect app features

• Free to download from the App Store and Google Play.
• Available in English and French.
• Access vital information about what to do before, during and after floods, earthquakes, wildfires, winter storms and severe wind.
• Receive a personalized risk report specific to your location, and customized list of items to include in your 72-hour emergency kit.
• Get notifications tailored to your emergency needs.
• Securely store your home and auto insurance information at your fingertips.
• All content is preloaded and accessible without internet connection. 

You can help us continue to be there for Canadians from coast to coast when they need it most by sharing the app with your colleagues, family and friends!

* For the first 10,000 downloads.

This blog post has been written by Mazdak Moini, who is vice president of Commercial Lines & Reinsurance at Aviva Canada Inc. Mazdak is responsible for leading Canadian and Group-wide strategic initiatives relating to underwriting, pricing, product and capital management, and providing risk management oversight to these activities. 

Mazdak Moini is a panelist/moderator at CatIQ’s Canadian Catastrophe Conference (C4 2017) on the Terrorism Risk: International & Canadian Perspectives and the Disaster Assistance sessions during the conference.

Canada’s $127-Billion-Dollar Disaster

Written by Joanne Kennell, CatIQ

Let’s set the scene: It’s a typical Thursday morning. The city of Vancouver is buzzing with morning commuters. People are lined up at their favourite coffee shop to get their morning caffeine fix, parents are dropping their children off at school, and on-route employees are busily weaving up and down sidewalks on their way to the daily grind. Then it strikes – a magnitude 9.0 earthquake ruptures 75 km from the city. The violently shaking earth crumbles buildings as if they are made of sand. It also cracks and breaks roads making them impassable, and knocks out power across the entire city. People are injured, and homes have been destroyed.

The societal impacts of such an event would be devastating, and the economic impact would be cataclysmic.

(United States Air Force/Wikimedia (Public Domain))

Catastrophic insured losses due to natural disasters, such as flooding, hail, wildfire, etc., have continued to increase in Canada over the past few years.  However, according to a study conducted by The Conference Board of Canada (McIntyre and Desormeaux, 2016), a large earthquake is likely the only event that could bring the industry down. And although such a dramatic event seems impossible here in Canada, according to Natural Resources Canada, there is a 30% chance a major earthquake will strike BC’s West Coast in the next 50 years – a statistic not to be sneezed at!

In order to determine the impact of a major B.C. earthquake, the IBC funded-study stress-tested for an earthquake that could result in more than $30-billion in insured losses – above the amount that the property and causality insurance industry could currently handle. This size of loss equates to a seismic event of magnitude 9 that occurs close to Vancouver. Following an earthquake of this magnitude, insurer failures would likely happen, and because insurance companies are required to back each other’s claims, this practice will collapse if the industry is overwhelmed by claims (Nelson, 2016).

The costs of a major earthquake off the coast of B.C. would not only impact the West Coast but “put the national economy in jeopardy” explains the report. The report considered the cost of destroyed property, deaths, lost jobs, and the struggles involved with rebuilding. Over a 10-year period, the total economic costs would be a mind-boggling $127.5-billion! Compare that to Canada’s costliest insured-loss catastrophe, the Fort McMurray wildfire, which cost nearly $3.6-billion (CatIQ).

The cost breakdown of a major B.C. magnitude 9 earthquake over the 10-year period is as follows:

·         $42-billion – the amount of losses that would be covered by property and causality   insurers

·         $96-billion – if the insurance industry failed as a result of the earthquake, this    
  would be the total loss in gross domestic product, adjusted for inflation

·         $133-billion – consumer spending would decrease by this much as people struggle
  to rebuild their lives

·         43,700 – the number of jobs lost

It is important to note that an earthquake generating losses above the insurance industry’s capacity would be extremely rare. In fact, according to the federal Office of the Superintendent for Financial Institutions, by 2022 there will be sufficient claims-paying capacity for a 1-in-500-year earthquake. However, as realized with Japan in 2011 and New Zealand just a few weeks ago, there is always the possibility that a larger than predicted earthquake could strike. This is why a report focusing on a worse-case scenario is important – it highlights gaps and areas in need of improvement within the Canadian insurance system. It also acts as a reminder that governments need to invest more in earthquake preparedness.

In Canada, there are roughly 4,000 recorded earthquakes each year. However, earthquake damage is not covered by a standard home insurance policy – it can be added on to an existing policy (IBC, 2016). Earthquake insurance covers contents caused by the shaking of the earth. If the shaking of the earth results in a fire (caused by a broken gas main, for example), only the loss or damage from the fire would be covered under a regular insurance policy.

According to IBC, approximately two-thirds of B.C. homeowners have earthquake insurance. However, B.C. is not Canada’s only major fault zone. There is one that lies on the Quebec City – Montreal – Ottawa corridor, and there is a 5-15% chance of a major earthquake impacting this area in the next 50 years. However, only 2% of residents in this zone have earthquake insurance (CBC News, 2016).

David Edington, who studies the rebuilding processes after the major earthquakes in Japan and New Zealand, explained to Metro News Vancouver (Li, 2016) that “[i]t’s a social problem for how you prepare for a low frequency but very high impact disaster.” Especially since B.C. does not experience earthquakes often, and even less occur in the Ontario/Quebec zone.

Pedro Antunes, deputy chief economist at The Conference Board of Canada hopes the results will serve as a wake-up call for policymakers. As the report explains, building codes need to be upgraded, and seismic regulations would save lives. People also need to be more aware of earthquake risks and should be encouraged to consider earthquake insurance coverage, especially in the Quebec City – Montreal – Ottawa corridor (CBC News, 2016).

References

CBC News. 2016. "Major quake could pose systemic risk to Canada’s financial sector, report says". CBC News Business. URL: http://www.cbc.ca/news/business/earthquake-insurance-report-1.3705332

Insurance Bureau of Canada. 2016. "Earthquake Insurance". URL: http://www.ibc.ca/on/home/types-of-coverage/optional-coverage/earthquake-insurance/

Li, Wanyee. 2016. "Major B.C. earthquake could cost Canadian economy $127.5 billion: report". Metro News Vancouver. URL: http://www.metronews.ca/news/vancouver/2016/11/23/bc-earthquake-to-cost-canada-economy-says-conference-board.html

McIntyre, Jane and Marc Desormeaux. 2016. "Canada’s Earthquake Risk: Macroeconomic Impacts and Systemic Financial Risk". The Conference Board of Canada.

Nelson, Jacqueline. 2016. "Major B.C. earthquake could put ‘national economy in jeopardy’". The Globe and Mail. URL: http://www.theglobeandmail.com/report-on-business/major-bc-earthquake-could-put-national-economy-in-jeopardy/article32969556/

Disaster-Proofing Canada: Learning from Floods and Fires

(Lapo Calamai, Director, Catastrophe Risk and Economic Analysis, Insurance Bureau of Canada (IBC))

Disaster-proofing Canada: Learning from floods and fires

Few Canadians will ever forget the images from May of this year of cars filled with families inching down Highway 63 away from Fort McMurray against a backdrop of flames.

At its peak, the Fort Mac wildfire covered 500,000 hectares – an area larger than Prince Edward Island. Firefighters dubbed it “The Beast.” In the two months before The Beast was brought under control, it destroyed 2,400 homes and buildings, and thousands of vehicles.

Within hours of the event, property and casualty (P&C) insurers activated emergency response plans, and the insurance industry is now responding to 44,000 claims totalling about $3.8 billion, making this the costliest insured disaster in Canadian history.

The wildfire that tore through northern Alberta stands as an important reminder that disaster can strike anywhere, with little warning. And Canada must be ready.

Canadians, governments and businesses can work together to prepare, so that when the worst hits, whether it’s a flood, a fire or an earthquake, those affected will get back on their feet quickly. Insurance Bureau of Canada (IBC) and its members are making it a priority to look ahead and anticipate ways to ensure Canadians are adequately protected. We call this “disaster-proofing Canada.”

Learning from past disasters – From Slave Lake to Fort McMurray

Every disaster holds lessons that can be applied to the next event. Before Fort Mac, Canada’s last large fire also happened in Alberta, in Slave Lake in 2011. Some 400 homes were destroyed – about one quarter of what was lost in Fort McMurray.

Back in Slave Lake, each insurer tackled the debris cleanup individually. But they quickly discovered that this “business-as-usual” approach simply couldn’t work given the scale of disaster: backhoes and bulldozers competing to access the same roads, properties and landfill sites. It wasn’t long before insurers realized that economies of scale and scope needed to be harnessed. The solution? Coordination and cooperation. Not an easy task for an industry made of over 200 highly competitive insurers – but essential nonetheless.

The scale of the task in Fort McMurray was even greater: not 400, but 2,400 homes – the largest number destroyed in any wildfire in Canada’s history. Building on their Slave Lake experience, however, insurers recognized that they needed a coordinated response. The municipality saw the value in coordination as well, but was very sensitive to the need to hire local, considering the tough economic times that the community was already facing before the fire.

IBC helped coordinate action, hiring a project manager to find a local contractor with the experience to handle the cleanup. The result? Today the vast majority of sites – some 98% – have been cleared, and the focus is now on getting ready for rebuilding and restoration come spring. An impressive result to achieve in just about three months given the unprecedented scale of the disaster.

Mitigating the cost of natural disasters through adaptation

While Fort Mac will forever mark the history of our country, it was hardly an isolated event. For several years now, insurers have been witnessing first-hand the growing impact of extreme weather events.

Evidence-based research clearly shows that climate change is contributing to an increase in wildfires, storms, flooding and severe weather activity – even in areas that were previously thought to be “risk-free”. And of all natural disasters, water is no doubt the long-term trend. Data unequivocally points to water-related damage having replaced fire as the number one cause of home insurance losses.

By taking preventive measures, Canadians and their governments can go a long way to protecting themselves, their communities and the national economy from the future impacts of disasters.

With flood being the country’s most frequent and costly disaster, IBC is currently in talks with federal and provincial governments to co-create a national flood strategy – in partnership with likeminded stakeholders in the academic and not-for-profit world.

Governments are well aware of the fiscal pressure generated by increased flooding. Average spending under the federal government’s Disaster Financial Assistance Arrangements (DFAA) – the program that provides reimbursement for large catastrophes – jumped from an average of about $40 million a year in the 1970s to more than $600 million a year in this decade. The Parliamentary Budget Officer (PBO) expects this to increase to over $900 million a year going forward. The vast majority of it – some 80% percent – is due to flood.

With the 2013 southern Alberta floods, DFAA costs reached a record $1.4 billion. This spending came directly out of the Canadian taxpayer’s pocket. In addition to that, the Alberta government incurred another $1.5 billion in disaster assistance costs, bringing the total cost to taxpayers for floods that year to about $3 billion. And this was of course on top of the $1.9 billion shouldered by the insurance industry, and the value of economic activity and production capacity that got wiped out in the process.

A key reason for the cost escalation experienced by governments across Canada is that there is currently no system in place to ensure that all victims of flooding events have adequate financial protection. And Canada is alone among G7 countries in this respect.

Insurance coverage for residential overland flooding has not historically been available in Canada, partially as a result of insufficient flood mapping data. With improvements in underwriting, modelling and risk assessment technology, however, this is now changing. Several insurers today offer residential flood insurance across the country.

Although flood coverage is still a relatively new product, we expect that ultimately it will be available for all but roughly 10% of Canadian homes. That 10% represents the properties at the highest risk of flooding. These homeowners have the greatest need for flood insurance but are unlikely to be able to obtain it without some form of public-private coordination. With risk-based premiums, which are critical for setting proper incentives and nudge consumers towards investment in risk-mitigation, high-risk properties would inevitably face an affordability problem.

As we witnessed this past Thanksgiving in Atlantic Canada, however, we are still a long way from ensuring that every Canadian has access to the financial protection they need to respond to floods. More needs to be done – and government has a critical role to play.

Along with this public-private coordination, IBC is advocating for new investments to make public assets more resilient to extreme weather, updated building codes, more stringent land use policies, individual and community-based home adaptation programs, and a host of flood mitigation initiatives based on both structural flood defences and natural infrastructure.

As Canadians will continue to face an ever increasing number of disasters, we must continue to focus on improving how we respond to help communities like Calgary, High-River or Fort McMurray get back on their feet. We must look forward to how we can adapt and reduce the impact of the next catastrophe. Disaster-proofing Canada demands we do both. 

Written November 30, 2016

References:

• A Primer on Financial Risk from Natural Disasters: The Case for Public-Private Collaboration - ​This paper provides a primer on the private disaster risk market and is designed to provide government officials with an understanding of how the private market functions in this area.

• The Financial Management of Flood Risk – An International Review: Lessons Learned from Flood Management Programs in G8 Countries.

This blog post has been written by Lapo Calamai, Director, Catastrophe Risk and Economic Analysis, Insurance Bureau of Canada (IBC). Having joined IBC in 2012, Lapo leads research, analytics and policy development to address some of the industry’s most pressing financial, regulatory and commercial challenges. He also leads IBC’s catastrophe risk management practice, working with governments and insurance executives across Canada to promote sound disaster risk management by leveraging risk transfer and catastrophe insurance and reinsurance solutions.

Lapo Calamai is a panelist at CatIQ’s Canadian Catastrophe Conference (C4 2017) on the Perspectives in Flood Risk Assessment and Mitigation workshop during the conference.

Canada’s Near Failing Grade in Flood Preparedness

By Joanne Kennell, Meteorologist at CatIQ

It may surprise you to learn that nearly all 10 Canadian provinces and Yukon have received a near failing grade when it comes to flood preparedness. According to a new report titled “Climate Change and the Preparedness of Canadian Provinces and Yukon to Limit Potential Flood Damage” by the University of Waterloo and sponsored by the Intact Centre of Climate Adaptation, these grades are a symptom of significant change being needed across the country. And these changes need to happen quickly in order for Canada to be prepared to address the climate-related risks of increasing severe weather events, including catastrophic floods.

In Canada, the majority of insured catastrophic losses are from water-related damage, and up until the Fort McMurray Fire (2016-05-Cat-0070) in Alberta this past May, the 2013 Southern Alberta Flood (2013-06-Cat-0049) was the costliest insured natural disaster with a CatIQ insured loss estimate of over $1.5 billion. According to the Office of the Auditor General of Canada, 2016, the federal government has spent more on recovering from catastrophic natural disasters over the last 6 years than in the previous 39 years combined. Clearly, climate change risks could pose a significant threat to not only Canada, but to the global financial system as both storm intensity and frequency continue to rise.

Figure 1: Catastrophic Insured Losses from Natural Disasters in Canada (1983 to 2016)

So what does the report mean by flood preparedness? Preparedness is defined as “the capacities and knowledge developed by governments, professional response organizations, communities and individuals to anticipate and respond effectively to the impact of likely, imminent or current hazard events or conditions”, the report quotes from The United Nations Secretariat of theInternational Strategy for Disaster Reduction (UN/ISDR), 2016. To survey the flood preparedness of Canada’s provinces and Yukon (Northwest Territories and Nunavut were not covered in the report), 103 government representatives across 91 provincial and territorial ministries, departments and agencies were polled on the preparedness to limit flood damage relative to current (2016) and future (2030) major rainfall events based on 12 categories (Feltmate, 2016):

1.       Floodplain Mapping

2.       Land-use Planning

3.       Drainage System Maintenance

4.       Sustainable Flooding Management

5.       Home Adaptation Audit

6.       Commercial Property Adaptation Audit

7.       Transportation Systems

8.       Electricity Supply

9.       Drinking Water Systems

10.   Waste Water Systems

11.   Public Health and Safety

12.   Emergency Preparedness and Response

Overall, the Canadian provinces and Yukon scored very well in maintaining Public Health and Safety and Emergency Preparedness and Response. However, many provinces fell short in the remaining 10 categories. For example, most survey participants agreed that current land-use planning practices do not “sufficiently restrict development in flood-prone areas” and that “municipal councils have significant power to override their own land-use restriction bylaws to approve new developments, even if the developments are in recognized flood-prone areas”. Additionally, four provinces are currently not involved in the development of a Home Adaptation Audit program, which is a program that helps homeowners assess their vulnerability and minimize their risk to flooding. Similarly, nine provinces indicated that they have not developed a Commercial Property Adaptation Audit program, which is comparable to the Home Adaptation Audit, but for businesses.

By now you must be itching to know how Canada, as well as individual provinces and territories, scored. Using a scale from A (strong flood preparedness) to E (weak flood preparedness); Canada received an overall grade of C-. This is not great, and “suggests that there is a considerable margin for Canada to better prepare for, and potentially mitigate, future flood risk” states the report. Ontario leads the pack with a score of B-, and the provinces with the lowest score include British Columbia and Prince Edward Island, which both received a D.

        Figure 2: The Canadian Average Flood Preparedness Score Across all Canadian Provinces and Yukon

However, the survey participants did recommend several measures that provinces and territories should take in order to limit future flooding risks:

1.       Create a position of Chief Adaptation Officer (CAO) whose duty is to identify    
  areas of both strength and weakness to flood preparedness and develop methods  
  to mitigate the risks

2.       CAOs would be in charge of ensuring that flood risk preparedness is deployed

3.       Provinces and territories should issue, on a multi-year cycle, audited public  
  reports on the state of flood preparedness and future challenges that may develop

4.       Provinces and territories should mandate that new development in flood-prone
  areas be restricted, and that municipalities should not be able to overturn bylaws
  set by provinces and territories

5.       Where practical, infrastructure should be re-built to better handle our changing
  climate

Although concerns related to flooding have been minimal in recent decades, the report concludes that “the risks of the past are not the risks of the present, and certainly not the risks of the future”, and failure to improve the preparedness of provinces and territories could result in unceasing economic losses, threatening Canada’s status as a safe country in which to invest and do business.

References

Feltmate, Blair. (2016). Climate Change and the Preparedness of Canadian Provinces and
         Yukon to Limit Potential Flood Damage. University of Waterloo. URL:
         http://www.intactcentreclimateadaptation.ca/wpcontent/uploads/2016/10/Intact-
         Centre-Climate-Change-and-the-Preparedness-of-Canadian-Provinces-and-Yukon-
         Oct-2016.pdf

Office of the Auditor General Canada (2016). 2016. Spring Reports of the Commissioner of
         the Environment and Sustainable Development: Report 2 – Mitigating the Impacts of
         Severe Weather. URL: http://www.oag-bvg.gc.ca/internet/English/parl_cesd

         _201605_02_e_41381.html#hd4a

The United Nations Office for Coordination of Humanitarian Affairs (UN/OCHA), Policy and
         Development Branch and United Nations Secretariat of the International Strategy
         for Disaster Reduction (UN/ISDR). (2008). Disaster Preparedness for Effective
         Response: Guidance and Indicator Package for Implementing Priority Five of the
         Hyogo Framework. Geneva, Switzerland: UN/ISDR and UN/OCHA. URL:
         http://www.unisdr.org/files/2909_Disasterpreparednessforeffectiveresponse.pdf

Is it Time to Pay our Winter Weather Dues?

Joanne Kennell, Meteorologist, CatIQ

As we near half way through the fall season, most of Canada, with the exception of Saskatchewan and Manitoba (sorry!), has been pretty fortunate in terms of not receiving a major snow storm or snowfall. And luckily, what is left of autumn will continue to be fairly good to Canadians. Temperatures will remain at or above normal in all of the provinces and territories except Newfoundland and Labrador. However, that doesn’t mean we won’t see cold and/or snow episodes before winter hits, because as all Canadians are aware, winter loves to give us a taste of what’s to come.

Ontario knows this first hand thanks to a Wednesday overnight and Thursday morning snowfall. It is a not-so-subtle reminder that winter is not far away. However, this bout of Ontario snow will be short-lived (thank goodness… I am not quite ready for snow), as temperatures this weekend are set to hit nearly 20^oC in some regions!

Overall, Canada has been quite spoiled in terms of temperatures. We had a fairly mild 2015-2016 winter and a balmy spring, followed by an extremely warm summer and our current warm-ish fall.

So, is it time to pay our weather dues?

Both the Farmer’s Almanac and weather models agree that yes, this weather honeymoon is over. Canada’s upcoming winter will be reminiscent of the 2013-2014 and 2014-2015 winters past. If you don’t remember those winters, let me remind you in two words: ICE COLD. This is bad news if you hate the snow and cold, but this is great news if you are an avid skier, skater, ice fisher, snowmobiler, you name it.

Let’s break down how winter will unfold across the county.

Looking to the west, British Columbia and parts of western Alberta will remain relatively mild and wet. The Prairie Provinces will likely experience some pretty frigid temperatures (likely the coldest in the entire country). However, they will experience below average snowfall. Don’t get me wrong, they will still get snow, and probably a lot of it, just not as much as previous years.

Most of Ontario and Southern Quebec will experience below average temperatures and lots of snow. And since the Great Lakes will remain warm for some time into the winter season, a lot of Ontario’s snow will be driven by lake effects.

Now, Atlantic Canada is expected to receive a “Classic Winter”. What this means is that provinces will receive a normal amount of snow and normal temperatures. And thanks to the warm Atlantic Ocean, some storms that develop could result in significant ice accumulation.

Why do we think this? Let’s look back to the winter of 2013. On December 20^th, a moisture-laden mass of air resulted in significant icy precipitation across Ontario, Quebec, and all the Atlantic Provinces. In Toronto, 43 hours of freezing rain occurred, while Trenton received over 55 hours of freezing precipitation. In Quebec and the Maritimes, surfaces were covered with ice 10 to 30 mm thick, and since temperatures remained below freezing, a lot of this ice remained for almost a week.

So, will there be a repeat ice storm this season? It is too early to say, but the right ingredients are definitely going to be there - it is just a matter of them mixing together properly. Let’s just say Atlantic Canada, Quebec and Ontario will remain an area of interest for CATs this winter.

Hurricane Matthew: The Record Breaker

Joanne Kennell, Meteorologist, CatIQ

The destruction ensued by Hurricane Matthew and its remnants, not only in Canada, but in Haiti, Cuba, the Bahamas, the Dominican Republic, and the United States, is heartbreaking. Lives were lost and people’s homes and possessions have been damaged or are in complete ruins. Our thoughts and prayers go out to everyone who is suffering because of this record-breaking storm.

Hurricane Matthew (2016-10-Cat-0081) began as a tropical wave the originated off the west coast of Africa and passed south of Cape Verde – a section of islands located 570 kilometers off the coast of Africa and is a region known for spawning long-lived tropical cyclones. What made Matthew such a record breaker was its intensity and endurance (Erdman, 2016). Not only was Matthew the longest lived Category 4-5 Hurricane on the Saffir-Simpson Hurricane Wind Scale in October in the Atlantic Basin, it was also the southernmost Category 5 Hurricane in the Atlantic Basin.

Tropical cyclones and hurricanes require a set of specific ingredients to form, but generally they need:

1)      A pre-existing disturbance such as a tropical wave

2)      Warm sea-surface temperatures of at least 26^oC

3)      At least 5 degrees south or 5 degrees south of the equator for the Coriolis Force       to take effect

4)      Lots of moisture in the lower and mid-levels of the atmosphere

5)      Weak vertical wind shear – a change in wind speed and/or direction with height

6)      Atmospheric instability

According to Dr. Philip Klotzbach, a meteorologist at CSU who specializes in Atlantic Basin seasonal hurricane forecasts, Matthew’s perseverance in the Atlantic Basin was due to a relative lack of wind shear and minimal dry air – exactly two of the key ingredients needed for tropical storm formation. But Matthew did not only break a nine-year streak without an Atlantic Basin Category 5 hurricane, it was also categorized as a Category 5 very far south and close to the equator. On September 30^th, just before midnight EDT, Matthew transitioned into a Category 5 hurricane with its centre at 13.3 degrees north.

However, what made Matthew such a record breaker, also made it extremely destructive and devastating. Although Matthew was no longer a hurricane as it impacted Canada’s Maritime Provinces, its leftover moisture, which was absorbed into a frontal zone, intensified a low-pressure system that inundated Nova Scotia and Newfoundland with heavy rains and gusty winds. According to Environment Canada, the town of Sydney, Nova Scotia, received 224.8 mm of rainfall and Gander, NL, received up to 124 mm of rain – both of which were one day record-breaking rainfall totals in each city.

Washed out Road in Buchans, Newfoundland 

Photo credit: Tammy @tammyharris96/Twitter

Unfortunately, all of this rain led to significant flooding in Sydney, including flooded homes and businesses, and many roads and bridges were washed out in Newfoundland. States of emergencies were declared in some Nova Scotia and Newfoundland communities, including Sydney, as well as Lewisporte, Little Burnt Bay, and St. Alban, Newfoundland.

Although the cost of this catastrophic event is unknown, it is expected to exceed CatIQ’s Catastrophe (CAT) threshold of $25M (insured industry loss). But how does this event compare to previous, similar incidents in the past?

Looking back to Hurricane Earl (2010), which did not meet the $25M threshold, but rather industry losses were estimated between $10M and $25M, it also originated from the Cape Verde region. In fact, Earl (2010-09-NE-0090) reached a peak intensity of a Category 4 hurricane and even made landfall near Liverpool, Nova Scotia as a Category 1 hurricane (Cangiolosi, 2011).  So why was Earl’s damage not as extensive like with Hurricane Matthew? Earl was a weakening hurricane at the time, and it was relatively fast moving, so there was not enough time to severely flood cities with massive amounts of rain. However, Matthew’s moisture acted as fuel to intensify a very slow-moving often stalled, low-pressure system. This resulted in unprecedented amounts of rain to fall in both Nova Scotia and Newfoundland.

Track of Hurricane Earl (2010)

Photo credit: Anhamirak and Cyclonebiskit/Wikipedia

Finally, let’s take a look at Hurricane Arthur (2014). Arthur (2014-07-Cat-0058) became an extratropical cyclone on July 5th while over the Bay of Fundy (Berg, 2015), which is located just west of Nova Scotia. Arthur continued to travel northeast toward the Gulf of St. Lawrence while producing strong winds and intense rains over Nova Scotia, Prince Edward Island, and New Brunswick. The system then reached eastern Labrador and Newfoundland. Arthur did in fact reach CatIQ’s Catastrophe (CAT) threshold of $25M by causing localized flooding, damaging properties and structures, downing trees, and causing massive power outages. What Arthur and Matthew had in common is the fact that their remnants of moisture were enhanced along a frontal boundary, which allowed for prolonged periods of rain and strong winds.

Downed Tree of Power Lines in Nova Scotia

Photo credit: Ken Stronach @kstronach24/Twitter

Although every catastrophic and notable event is unique, we can sometimes look for patterns in past events to try to determine potential damages of future, similar systems. Will Hurricane Nicole - who is now the longest-lived Atlantic named storm forming this late in the year - impact Canada as intensely as Matthew? No, it won’t. Parts of Atlantic Canada, predominately eastern Newfoundland including the southern Grand Banks, will only see some ocean swells and gale force winds this weekend. Thank goodness.

References:

Berg, Robbie. 2015. Tropical Cyclone Report: Hurricane Arthur. National Hurricane Center. URL: http://www.nhc.noaa.gov/data/tcr/AL012014_Arthur.pdf

Cangialosi, John P. 2011. Tropical Cyclone Report: Hurricane Earl. National Hurricane Center. URL: http://www.nhc.noaa.gov/data/tcr/AL072010_Earl.pdf

Erdman, Jon. 2016. Hurricane Matthew Shatters Record. Weather.com. URL: https://weather.com/storms/hurricane/news/hurricane-matthew-records-notables-2016

The Diligent CAT Adjuster - Being Prepared for Deployment

Mike Koch (Kitchener, ON)

When catastrophic events occur there is an immediate need for response. Both natural and man-made catastrophic events often cause devastating and long-ranging effects to the individuals, communities and natural environments impacted. Claims adjusters play a critical role during such events as they serve as the eye and ears of policyholders that have vacated the affected area and the carriers that underwrite these policies. After an event has occurred, and the impacted area is deemed secure enough for emergency/first response personnel and associated professionals to enter, claims adjusters are placed onsite to conduct their investigation on the impact and severity of damages sustained on insured properties, and to manage and expedite the claims process. The services of these individuals come into play during the thick of it, entering environments that have been crippled by the very destructive force that swept through it. Preparation is key for claims adjusters ensuring that they have the resources, supplies and equipment to effectively navigate through the impacted environment and execute their functions accordingly. To that effect, adjusters need to be aware of the following things and prepare as needed.

Items that should accompany any claims professional being deployed to a CAT site consist of:

• The limited available power sources within the effect area will hinder one’s ability to use debit or credit cards to make purchases or to withdraw money from an ATM. It is recommended that adjusters bring with them a fair sum of money either in U.S. or local currency to purchase essentials such as meals, gas, water, etc.

• The potential lack of power will have an impact on the operability of local infrastructure and certain accommodations that we have grown accustomed to such as running water, heating, cooling and refrigeration.  It is wise for adjusters to bring a small cooler to house water and refreshments. Also, in the absence of lighting a handheld flashlight should be packed.  

• Small first-aid kits can be useful in treating minor scrapes that an adjuster may sustain.

• A small cache of business supplies consisting of a stapler, paper clips, pencil, paper, ruler, measuring tape, etc. should be packed to assist adjusters with the documentation of their activities.

• The attire that an adjuster packs should be versatile enough to accommodate the climate that they are about to enter and be suitable for walking through rummage while conducting an onsite investigation, and to meet with superiors, clients and other business professionals. Safety and practicability come first making safety shoes and a hard hat are a must. Other essential items that an adjuster should pack include a lap top along with a spare battery and car charger, a camera and an updated passport.

• Adjusters should always be mindful and respectful of local customs and traditions and act accordingly

• As language may be a barrier, adjusters should come prepared with language conversation books or translation resources that they can call on for assistance.

• As navigation may sometimes be a challenge, coming prepared with maps of the local area and a GPS device can prove to be most useful.

This blog post has been written by Mike Koch, National Property & Catastrophe Manager, Crawford & Company (Canada) Inc.

Pat Van Bakel, President & CEO, Crawford & Company (Canada) Inc. is on CatIQ's Canadian Catastrophe Conference's 2016 Advisory Committee and will be a panelist on the Claims Executives panel during the conference.

Pat Van Bakel - @pjvb71
Crawford Catastrophe - @CrawCAT
Crawford & Company - @Crawford_News