Toronto July Flooding May Cause Significant but Manageable Claims for Canadian Insurers

On July 16, 2024, the remnants of Hurricane Beryl led to extensive flooding and major disruptions in several areas of the Greater Toronto Area.
This commentary discusses the credit implications as a result of the storm, if any, and the increasing popularity of flood insurance coverage

Key Highlights

-- Toronto recently experienced significant flooding due to heavy rainfall from the remnants of Hurricane Beryl.

-- While no official damage loss numbers have been reported, we believe that it is comparable to the 2013 Toronto flood, which caused around $1 billion in insured losses.

-- The insured losses, while large for a single weather event, are manageable for the insurance industry. We foresee no direct credit rating implications arising from the Toronto July 2024 floods.

"In recent years, we note that the optional flood insurance has become more popular, especially with extreme weather events becoming more frequent," said Steve Liu, Assistant Vice President, North American Insurance Ratings.