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Insurance Companies and Climate Change: What's Being Done?

Jun 5, 2024 1:51:06 PM

Insurance companies are in the business of risk management and mitigation. They use data and analytics to determine the likelihood of a risk occurring and what the costs for the respective damages would be if it were to happen. If insurance is not available or prohibitively expensive, the risk is probably quite high. This leads us to the main question of the day; what is the risk climate change poses to Canadians and what insurance companies are doing about it?

Understanding the Risk of Climate Change on Insurance

Alberta and Canada have seen an increase in extreme weather events as a result of climate change. Disasters such as mass flooding, wildfires, and extreme hail have all seen an increased risk. Alberta has seen a fair share of disastrous events in recent memory. The 2011 Slave Lake wildfire ($700 million damages), the 2013 Calgary flood ($6 billion damages), the 2016 Fort McMurray wildfire ($9.9 billion damages), and the 2020 Fort McMurray floods ($522 million damages) are just a few examples of extreme losses. While these disasters had massive economic impacts, our first responders and evacuation efforts saved countless lives. Loss of life during these disasters has been nearly zero in all of the above scenarios. 


While losses of this magnitude are less common, severe losses are becoming more frequent. Between June 18, 2023 and July 26, 2023, Alberta and Saskatchewan suffered an estimated $280 million in insured damages from storms and hail. That equates to nearly $7 million in damages every single day during that period. When we see a trend of more extreme weather events creating more claim scenarios and inflation driving up the cost of claims, the cost to purchase insurance is likely to go up in suit. 


What Are Insurance Companies Doing About Climate Change? 

On a more positive note, Canada's top insurance companies aren't just sitting on their hands waiting for the insurance market to collapse after the next colossal disaster. Insurers are investing millions into preventative measures and climate initiatives to mitigate the impacts of climate change for their policyholders. 


Aviva Insurance Climate Action

Aviva Canada has made great strides in both limiting their greenhouse gas emissions and preparing policyholders for potential impacts. 

Aviva has set a target of a becoming net-zero company by 2040 with net-zero operations and supply chains by 2030. Their commitment to net-zero includes not simply using carbon offsets and only carbon removals will count towards their ambitious targets. This has started with investing $350 million in green assets in Canada and $10 billion globally. 


Aviva has partnered with Canada's World Wildlife Fund to offer nature and climate grants to support projects such as planting trees, creating wildlife habitats, and projects enhancing biodiversity projects. 

For Aviva policyholders, they have multiple programs and subsidies available for clients to make greener choices more affordable. One of these such programs is Aviva's electric car initiative which helps with the cost to purchase, own, and maintain an electric vehicle. Aviva has many climate-conscious programs available to their customers. Talk to your insurance agent or broker for more information about Aviva's climate programs.

Aviva organized an Earth Day trash cleanup with members from Aviva and their brokers participating. Armour had two team members who got the opportunity to partake. 

Aviva Canada Does Trash Cleanup In Edmonton

Intact Insurance Climate Adaptation 

Intact Insurance has made considerable investments in climate adaptation. Intact has invested considerable efforts into flood risk research through the University of Waterloo Research Centre. Their research has helped Canadian municipalities better prepare for heavy rainfall, river, and coastal flooding. 

They have launched a 50-point questionnaire that assesses potential flood hazards and actions that can be taken to mitigate those flood risks. The Intact Municipal Flood Risk Check-Up has already had impacts across Canada and has helped limit and prevent water-related damages. 

New for 2024, Intact has employed the services of Wildfire Defense Systems to protect the homes of policyholders in Alberta and British Columbia ahead of the wildfire season. This service will be provided at no additional fee or cost and will help prevent damage and property loss.

Institute for Catastrophic Loss Reduction

The Institute for Catastrophic Loss Reduction (ICLR) is an independent not-for-profit that was founded by the insurance industry in 1997. They have been backed by many major insurance companies in Canada to reduce the loss of life and property damage from catastrophic losses.

The ICLR has been instrumental in helping individual homeowners, municipalities, insurance companies, and even business owners in loss reduction from catastrophes. They have an incredible repertoire of useful guides for how to mitigate climate impact on your home. A few such guides include:

The ICLR has also created a comprehensive guide for business owners to prepare for extreme weather and natural disasters. These resources are all completely free for use and contain excellent information on climate change mitigation and risk reduction.


Nearly every insurance provider in Canada has made substantial investments in climate change mitigation and adaptation. The industry as a whole is working diligently to ensure that there is a sustainable future. Talk to your agent or broker for information about what your insurance provider is doing for climate change.

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Jake McCoy

Written by Jake McCoy


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