Insurers brace for claims as wildfire rages through Fort McMurray

Insurers brace for claims as wildfire rages through Fort McMurray

Excerpted article written by  JACQUELINE NELSON

The Globe and Mail

As wildfire continues to rage through Fort McMurray, insurance companies are readying for claims to hit, comparing the devastation to one of the country’s costliest natural disasters.

Intact Financial Corp., Canada’s largest property and casualty insurer, has sent staff to the region and increased the capacity of its phone lines. The company said Wednesday morning that losses are already piling up.

“So far, in terms of losses reported since last night, we have about 40 losses reported. Some are evacuations, some are total losses … probably about 25 fires at this point,” Mathieu Lamy, senior vice-president of claims at Intact, told analysts on an earnings conference call, adding that it’s “very early to assess where it’s going to end up.”

The damage in Fort McMurray is drawing comparisons to losses taken by insurers in the spring of 2011 when flames engulfed the town of Slave Lake, Alta. – the most expensive catastrophic loss caused by fire that has ever been recorded in Canada.

Slave Lake caused about $742-million in insured losses and destroyed about one-third of the town, according to the Insurance Bureau of Canada (IBC), an industry group. That puts it in the top five costliest disasters in Canadian history, in a list topped by the 2013 floods in Alberta that caused $1.8-billion in insured damages.

“I would say there are lots of similarities between Fort McMurray and Slave Lake,” said Intact chief executive officer Charles Brindamour on the call, stressing that it was too early to provide comment on the extent of the damages and that customer safety was the paramount concern. Intact had a larger exposure to the Slave Lake disaster because of its market share in the region, and the company’s losses climbed to between $45-million and $55-million after tax as a result of those fires.

Alberta has been grappling with an above-average number of fires of late. In 2015, there were 1,786 wildfires, according to government figures – the third-highest number in the past 25 years. Air tankers dumped enough flame retardant to fill four Olympic-sized swimming pools to manage the fires in 2015.

In 2016, the wildfire season began a month early on March 1, after low levels of snow and rain were recorded.

Mr. Brindamour said Intact had been watching Fort McMurray since the weekend for signals that fire damages could become catastrophic. Yesterday, Intact began sending extra people to Alberta to prepare its response efforts for as soon as access to the sites becomes available.

Other insurers are also mobilized and ready to handle increased call volumes, said Steve Kee, spokesman for the IBC. The IBC has set up its own emergency response line to take calls from residents with questions or concerns. The number is 1-844-227-5422.

Homes and businesses in the area may have different levels of coverage, but policies typically cover fire damage as well as additional living expenses during the time people were forced to leave their homes following the evacuation order.

As Intact waits for more information, the company has tallied its policies in the area. “We know we insure about 1,500 houses, 1,300 tenants in condos,” said Intact’s Mr. Lamy, adding that the company would also be exposed to automotive risk with potential damage to an unknown number of vehicles.

Losses reported on commercial insurance policies can also add up quickly and Intact said it has about 350 clients with insurance for their property, building contents and losses from business interruption. These policies offer a range of coverage from about $20,000 to $12-million, Mr. Lamy said.

Read more

Institute for Catastrophic Loss Reduction experts available for media interviews regarding Fort McMurray wildfire

Disaster mitigation experts from the Institute for Catastrophic Loss Reduction (ICLR) are available to answer media inquiries concerning the wildfire in Fort McMurray, Alberta.

ICLR experts below are available to answer questions relating to the effects of wildfire on homes and commercial structures, and about what home and business owners can do before wildfires strike to reduce potential damage to their properties. ICLR is a leading national centre of excellence on preparing for, repairing and rebuilding safer, stronger structures after wildfires and other disasters to make them more resilient.

Paul Kovacs is founder and Executive Director of the Institute for Catastrophic Loss Reduction at Western University. He is Canada’s leading authority on insurance, natural hazards and climate change and has been a contributing author to numerous international and Canadian reports on reducing the risk of loss from earthquakes, flood, severe wind and wildfire. He has written more than 200 publications and articles and is a passionate champion for insurance, disaster resilience and adaptation to climate extremes.

Glenn McGillivray is Managing Director of the Institute for Catastrophic Loss Reduction. As an insurance writer and commentator, his work has been widely disseminated across Canada. Glenn has written more than 190 magazine and journal articles, publications and blogposts on a range of issues related to insurance, reinsurance, natural hazards and preparedness.

Additionally, independent wildfire expert Brian Stocks is available to answer questions pertaining to extreme fire behaviour, the nature of fires like the one currently impacting Fort McMurray, and some of the lessons learned from the May 2011 wildfire in Slave Lake, Alberta.

Brian Stocks served with the Canadian Forest Service in several capacities for almost 40 years, most recently as senior research scientist, before retiring in 2005. He is currently President of B.J. Stocks Wildfire Investigations and is adjunct professor, fire science, at the University of Toronto. He has a B.A. in forestry from the University of Toronto and an M.A. in forestry from the University of California, Berkeley. Brian served on the Wildfire Science Group as part of the Flat Top Complex Wildfire Review Committee, which provided key recommendations in relation to the May 2011 wildfire in Slave Lake, Alberta.

*           *           *           *

Established in 1998 by Canada’s property and casualty insurers, ICLR is an independent, not-for-profit research institute based in Toronto and at the Western University in London, Canada. ICLR is a centre of excellence for disaster loss prevention research and education. ICLR’s research staff is internationally recognized for pioneering work in a number of fields including wind and seismic engineering, atmospheric sciences, water resources engineering and economics. Multi-disciplined research is a foundation for ICLR’s work to build communities more resilient to disasters.

SOURCE Institute for Catastrophic Loss Reduction

For further information: Media contact: Glenn McGillivray, Managing Director, ICLR, tel. 416-364-8677, ext. 3216, cell 416-277-5827, gmcgillivray@iclr.org

Aviva Canada is mobilizing to assist Fort McMurray customers in wildfire

Aviva Canada is mobilizing its Catastrophe (CAT) team to assist customers in the Fort McMurray area, will be on the ground tomorrow morning and are at the ready to take calls now.

“Our hearts go out to the people of Fort McMurray.  The safety of the residents, and that of the fire-fighting teams who are doing everything possible to get the situation under control, must be the primary focus,” said Greg Somerville, President and CEO, Aviva Canada.

Starting tomorrow, senior Aviva claims representatives will open a temporary command centre at the Canalta Lac la Biche Hotel, 9905 83 Avenue, Lac la Biche. Initial support will focus on issuing cheques for living expenses and other immediate needs. Every effort will be made to respond to the needs of our customers. They can count on us to be there for them,” said Somerville.

Peter Corsano who is leading Aviva Canada’s catastrophe response is personally directing claims service for the area. Area residents with an Aviva policy are asked to contact Aviva as soon as possible at 1 866 MY AVIVA (1 866 692 8482) to register their claim and receive immediate assistance. Aviva is working with their insurance brokers in the area to provide additional support.

As soon as the evacuation order has been lifted from Fort McMurray, a new temporary Aviva location will be set up in the town and adjusters will be able to respond directly to the catastrophe and help the community deal with their losses.

Customers can check avivacanada.com for more information on Aviva’s response and updates on the situation.

About Aviva Canada

Aviva Canada is one of the leading property and casualty insurance groups in the country providing home, automobile, leisure/lifestyle and business insurance to more than three million customers. A wholly-owned subsidiary of UK-based Aviva plc, the company has more than 3,500 employees, 25 locations across Canada and approximately 1,500 independent broker partners.

Aviva Canada invests in positive change through the Aviva Community Fund, Canada’s longest running online community funding competition. Since its inception in 2009, the Aviva Community Fund has awarded $6.5 million to over 222 charities and community groups nationwide.

For more information visit avivacanada.com

SOURCE Aviva Canada Inc.

Facts about Fort McMurray, the northern Alberta community threatened by fire

FORT MCMURRAY, Alta. _ A look at Fort McMurray, the northern Alberta community in which several neighbourhoods were under an evacuation notice Tuesday because of a wildfire:

LOCATION: Fort McMurray is 435 kilometres northeast of Edmonton on Highway 63, just west of the Alberta-Saskatchewan boundary.

SIZE: Fort McMurray is the largest community in the Regional Municipality of Wood Buffalo. A 2015 municipal census pegged the population of the region at about 125,000. The urban centre of Fort McMurray had just over 61,000 people, according to the 2011 federal census.

ACCESS: Highway 63 is the major route to the Wood Buffalo region. The fire, which started Sunday, jumped the highway Tuesday.

HISTORY: Fort McMurray was once a fur trading post.

TODAY: Fort McMurray is best known now as a hub for the oilsands industry, which is the top employer in the region. The industry has been hit hard by the downturn in the energy sector.

canada-press

Feds quietly paid $75M settlement for Lac Megantic victims and to avoid lawsuits

By Andy Blatchford

THE CANADIAN PRESS

OTTAWA _ The federal government quietly spent $75 million to settle with victims and creditors affected by the Lac-Megantic rail disaster  a contribution that also shielded it from lawsuits related to the deadly crash.

Former transport minister Lisa Raitt said the deal, which involved 24 other defendants who settled, was under negotiation before her Conservatives lost the October election to the Liberals.

The Liberals have refused to reveal how much the government gave to the $460-million settlement fund, even though at least two parties accused of wrongdoing in the deadly Quebec derailment disclosed their contributions.

But in a recent interview Raitt said the amount was public.

She said it was included in Transport Canada’s supplementary estimates as well as in its quarterly financial report under “out-of-court settlement.” The amount listed is $75 million.

Last week, Transport Minister Marc Garneau said the figure was “classified” when asked how much taxpayer money the government set aside for the settlement.

Garneau also reiterated Ottawa’s denial under both the Liberals and the Tories that it had any legal responsibility for the 2013 oil- train accident that killed 47 people and levelled part of Lac-Megantic.

“We don’t acknowledge that we had any responsibility; however, we did want to make a contribution because of the impact of this terrible tragedy in Lac-Megantic,” Garneau said last week.

Raitt agreed that the government’s main goal behind the settlement was to speed up the process.

“The motivation was simple: this was an opportunity to get money to the victims for wrongful death in a shorter period of time through the U.S. bankruptcy proceedings as opposed to a long, drawn-out, litigious court case,” Raitt said in a recent interview.

The government’s decision to settle may have also been made to avoid the cost of fighting the allegations in court. It would have faced numerous lawsuits related to the derailment on both sides of the border, said the U.S.-based bankruptcy trustee for the company at the centre of the crash Montreal, Maine & Atlantic Railway.

Robert Keach has also said that, contractually speaking, the arrangement explicitly stated the settling parties were not acknowledging any liability with their contributions.

The Transportation Safety Board’s 2014 report on the crash said Transport Canada failed to recognize that the railway had urgent safety problems and was not following the rules. It also said the department failed to audit safety procedures at MM&A and didn’t conduct enough inspections.

Raitt responded to the TSB report at the time by saying the government’s role was to put the rules in place. The companies, the Conservative minister added, were expected to follow those regulations something she said MM&A did not do.

In the recent interview, Raitt reiterated the position that the rules weren’t respected.

“We don’t believe we are liable and it’s not an admission of liability,” said Raitt, who added she would have publicly disclosed the government’s settlement contribution.

Irving Oil has announced it had contributed $75 million to the fund. The train was transporting crude oil to Irving’s refinery in Saint John, N.B.

World Fuel Services Corp., the U.S. company that owned the oil aboard the train, announced a few months later that it provided US$110 million toward the settlement.

canada-press

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from ILSTV

You have Successfully Subscribed!

Pin It on Pinterest