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GBF2014 - Glenn McGillivray - Cities in the Crosshairs

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GBF2014 - Glenn McGillivray - Cities in the Crosshairs

  1. 1. Cities in the crosshairs The trend to more and larger catastrophic losses in Canada Glenn McGillivray Managing Director Institute for Catastrophic Loss Reduction October 2, 2014
  2. 2. Number of cat. events 1970-2013 0 20 40 60 80 100 120 140 160 180 200 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Swiss Re, sigma
  3. 3. Insured losses 1970-2014(1H) 0 10 20 30 40 50 60 70 80 90 100 110 120 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Swiss Re, sigma USD billion at 2005 prices
  4. 4. Insured losses by peril CLIMATE RELATED EARTHQUAKES VOLCANOES GEOPHYSICALEarthquake, volcanic eruption METEOROLOGICALSevere weather, winter & tropical storms, hail, tornado HYDROLOGICALRiver & flash flood, storm surge, landslide CLIMATOLOGICALHeatwave, freeze, wildlandfire, drought TREND
  5. 5. Global disaster damage Annual insurance disaster claims, billions, adjusted for inflation 20 fold increase since 1970s!
  6. 6. Canadian disaster damage Number of events 0204060801001201401601801960s1970s1980s1990s2000sMeteorological - HydrologicalGeological
  7. 7. 0 100 200 300 other winter storm tornado/hurricane wildfire thunderstorm flood Canadian disaster data base, number of events in Canada, 1950-2011 Canadian catastrophes
  8. 8. Canadian cats 2009 Winter storms in eastern Canada (Feb. 2) $25 million Hamilton rain (July 26) $100-to $150 million Alberta wind etc. (August 2-3) $500 million Mont Laurier tornado (August 4) $6 million Manitoba hail etc. (August 13-15) $50-to $75 million Ontario tornadoes (August 20) $50-to $100 million Tropical storms Bill & Danny (August 23 & 29) $10 & 25 million Source: Aon Benfield (Canada)
  9. 9. Canadian cats 2010 Saskatchewan storms (Spring) Leamington & Harrow tornadoes (June 6) Midland tornado (June 23) Calgary hailstorm (July 12) >$400 million Hurricane Igor (September 21)
  10. 10. Canadian cats 2011 Storms in Ontario & Quebec (March) Storms in Ontario & Quebec (April) Wildfire in Slave Lake, Alberta (May 15) $700 million Flooding in Saskatchewan, Manitoba, Quebec (Spring) Hail, tornadoes and wind in Alberta, Man. & Sask. (July 18/19) Tornado in Goderich (August 21) Hurricane Irene (August 28 to 30) Alberta windstorm (November 27)
  11. 11. Canadian cats 2012 Flooding and wind in Ontario and Quebec (May 26 to 29) Flooding, wind and hail in Alberta (July 12) Flooding, wind and hail in Ontario (July 23) Hail and wind in Alberta (July 26) Flooding, wind and hail in Alberta (August 12)
  12. 12. Canadian cats 2013 Two small events early in the year Southern Alberta flood (June 19-21) $1.7 billion (preliminary) GTA flood (July 8-9) >$850 million (preliminary) Ontario/Quebec storm (July 19)
  13. 13. 2013 high water marks Canada’s costliest and third costliest insured loss events within two weeks of each other Ice storm now the second costliest –took 15 years! Two billion dollar natural catastrophes in one year –a first! Second place event (Slave Lake) fell not one, but two notches to fourth place 5thconsecutive year of billion-dollar events
  14. 14. High River, Alberta, Canada © 2013 Reuters
  15. 15. June 23, 2013 © 2013 Reuters/Andy Clark
  16. 16. © 2013 AP Photo/The Canadian Press, Jonathan Hayward
  17. 17. Calgary, Alberta, Canada © 2013 AP Photo/The Canadian Press, Jonathan Hayward >$1.7 billion insured damage
  18. 18. Toronto, Ontario © 2013 AP Photo/The Canadian Press, Winston Neutel
  19. 19. © 2013 AP Photo/The Canadian Press, Frank Gunn
  20. 20. © 2013 Reuters/Mark Blinch
  21. 21. © 2013 Reuters/Mark Blinch >$850 million insured damage
  22. 22. Toronto, Ontario $225 million insured damage
  23. 23. Burlington, Ontario August 4, 2014 © 2013 Reuters/Mark Blinch $200 million insured damage
  24. 24. Billion-dollar years 1998 –due solely to the ice storm 2005 –due greatly to the August 19 GTA rainstorm 2009 –due greatly to back-to-back windstorms in Alberta 2010 –due greatly to large hailstorm in Alberta 2011 –due greatly to Slave Lake wildfire 2012 –due greatly to one large and two smaller hailstorms in Alberta 2013 –due to the Southern Alberta flood and GTA flood First time ever for two billion-dollar events 2014 -$600-to $700 million so far
  25. 25. Why are losses rising? More people and property at risk Aging infrastructure The climate is changing
  26. 26. New normal “The Institute for Catastrophic Loss Reduction (ICLR) reports that large insured losses from extreme weather appear to be ‘the new normal’ for the Canadian insurance industry, expecting that large-loss years will no longer be rarities.” Canadian Underwriter (November 6, 2012)
  27. 27. New normal Increasing liability concerns Corporate/professional Directors and officers Errors and omissions Public Municipal
  28. 28. What can be done? Loss prevention Risk transfer
  29. 29. Loss prevention Structural measures Non-structural measures Public awareness
  30. 30. Structural measures
  31. 31. Structural measures -hard
  32. 32. Structural measures -hard
  33. 33. Structural measures -hard
  34. 34. Structural measures -hard
  35. 35. Structural measures -hard
  36. 36. Structural measures -hard
  37. 37. Structural measures -soft
  38. 38. Structural measures -soft
  39. 39. Risk transfer Private (re)insurance sector Public sector Public/private partnerships Capital markets
  40. 40. Massive gap between total and insured losses shows insurance potential Natural and man-made catastrophe losses 1980-2012, in USD billion (2012 prices) 0501001502002503003504001980198519901995200020052010Insured lossesUninsured losses
  41. 41. Risk transfer Insurance considerations Rising cost Homeowners Businesses Governments Availability Restrictions Sewer backup Commercial flood insurance in Alberta
  42. 42. When the feds say we have a problem… ”The rising cost of natural disasters and the financial burden on Ottawa is the country’s biggest public safety risk”… Public Safety Canada, 2013/14, Report on Plans and Priorities
  43. 43. Thank you! gmcgillivray@iclr.org www.iclr.org www.basementfloodreduction.com Twitter: @iclrcanada

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