Raging Inferno in Western Canada: Implications for Canadian Property and Casualty Insurers

Morningstar DBRS published a commentary discussing the Jasper wildfire (now named the Jasper Wildfire Complex) and the 2024 wildfire season's impact on Canadian property and casualty (P&C) insurers.

Key highlights include the following:

-- While Canadian P&C insurers are once again facing a potentially higher-than-average wildfire season, we expect the related losses to be manageable.
-- The Jasper Wildfire Complex could potentially cause up to $700 million in insured losses, with likely extra claims from tourism businesses.
-- The Canadian P&C industry is well prepared for wildfire-related events, given its strong capitalization, diversification, and reinsurance risk transfer strategy.

"The potential insured damage caused by the 2024 wildfire season should be manageable for Canadian insurers, but if extreme weather events continue to happen more frequently in 2024, Canadian P&C insurers may start facing earnings pressure," said Steve Liu, Assistant Vice President, Global Insurance & Pension Ratings.