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Sydney, Nova Scotia, following Hurricane Fiona. File photo.

Fiona Likely Caused Record Insured Losses In Atlantic Canada

By Brad Perry Sep 28, 2022 | 1:02 PM

Fiona will likely cause record insured losses across Atlantic Canada, according to one credit rating agency.

Initial estimates from DBRS Morningstar suggests insured losses could range from $300 million to $700 million.

But the agency said it expects those losses will be manageable for the insurance industry as a whole.

“This would be significant but not large enough to affect the financial strength of the large, nationally diversified insurance groups which are the top participants in the property insurance market in Atlantic Canada,” Patrick Douville, vice-president of insurance, said in a statement.

Given the “relatively small scale” of the Atlantic Canada property insurance market, said DBRS, insured losses should remain in line with other recent severe weather loss events across Canada, which were “manageable” for the industry.

The agency said adequate reinsurance coverage remains a key tool for insurers to manage risk exposure to Atlantic storms, which may worsen because of climate change.

Reinsurance is also known as insurance for insurers or stop-loss insurance. Insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.

According to the Insurance Bureau of Canada, reinsurance companies typically cover catastrophic losses, when the total losses exceed a specified amount.


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