Insurance and Other Financial Services



Ontario Insurance, Natural Disasters, and Vulnerability

The number of natural disasters related to weather has risen dramatically in Canada as seen in the graph below. Floods and ice storms are only two of the disasters that the Emergency Preparedness Center has to consider. Ontario has experienced natural disasters since 1999. One example is the flooding in Peterborough in 2004.

1. Name 3 of the largest disasters in last two decades in Canada. In Ontario?
2. What large natural disaster happened in Peterborough, Ontario in 2004? Approximate cost?
3. How big a role does drought play in natural disasters? Hint: check agriculture and lake levels.

ACTIVITY 2 Research
1. List the top 10 natural disasters that have taken place in Canada according Environment Canada.
2. Conservation Ontario is the name of the organization that includes all Conservation Authorities. What was the natural disaster that prompted the formation of this organization? What is the geographic area and mandate of any Conservation Authority? How many are there in Ontario? and

The Institute for Catastrophic Loss Reduction was founded to provide a forum for insurers and others to work together to reduce the loss of life and property caused by severe weather and earthquakes. The results of their assessment studies led the insurance industry to conclude that a number of factors contributed to the rising disaster losses. These include climate change, aging infrastructure, and an increase in people and property at risk. See

Climate Change as a Factor

The climate projections for the end of this century (2100) are greater than 20oC for the Canadian Arctic and from 3 to 10oC for the rest of the country. (See IPCC QUICK TIME.) Climate change is projected to increase weather extremes, both in frequency and in severity. For example, extremes in weather such as heavy precipitation in short periods of time increase the vulnerability of our infrastructure to flooding. Retrofitting existing structures, and building for lower extremes to withstand the increase in weather loads, for example, snow load, ice loads or flooding, should be done with updated designs which consider the impacts and projections of climate change. Considering the risk of return of known extreme weather events should be part of planning for infrastructure renewal or expansion.

The risk of a return of the 1998 ice storms to areas in Ontario is shown below.

Source: Auld and MacIver, Environment Canada, 2000.

1. What kind of map is this based on? What does the line with the number 30 represent?
2. State two geographic /m meteorological reasons why the area of highest risk is located between Shelburne and Fergus? Check this against the eastern Ontario data provided by around Kemptville. What could be the reason for the severity of the 1998 ice storm there?
3. What was the most significant change in people’s lives during this ice storm?

ACTIVITY 4 Research
1. Answer questions 3 and 4 with respect to the flood in Peterborough, Ontario, 2004.
2. What other Ontario cities might be susceptible to such flooding?

To understand how a small change in temperature can be responsible for more temperature extremes, find the bell curves for the changes in frequency of extreme weather. See Section 2.4 Graphs and Analysis in Section 2 Overarching Concepts.

An increase of 1.6oC in the mean air temperature would cause the change in frequency of extreme maxmium temperatures to be much greater. Extremely warm summers at this location, normally expected every 25 years, would have a return period of only one year in the warmer climate. Small temperature changes can thus result in significant changes in the extremes.

Aging Infrastructure as a Factor

In the past few decades Ontario, as the rest of Canada, has spent less of its GDP on infrastructure. The age of existing infrastructure is at least an average of 25 years. Upgrading and/or designing new infrastructure means building more than roads, bridges or mass transit. It includes sewage and water treatment, delivery systems, and public buildings.

ACTIVITY 5 Research
1. How old is the sewer system, the water treatment and delivery system, the power system or the public buildings, such as schools, in your local municipality?
2. What emergency measures are in place for natural disasters in this municipality?
3. Where are the plans for these emergency measures? Are they available to the public?

Societal factors

The size and wealth of human populations are also factors in the increasing cost of natural catastrophic losses. The size and density of the population, especially in urban areas, is reflected in the cost of these losses. The urbanization of the province, indeed of Canada, is also reflected in the number of motor vehicles registered.

ACTIVITY 6 Research
1. What is the relationship between increase in the urban population and the number of motor vehicles registered in Ontario from 1901 to 1999?
2. Check the development of Ontario roads in Section 5.2.2c. How many kilometers of roads are there in Ontario in 2005?
3. Carry out the same research for the number of kilometers of railroad in the Ontario.

Responses of society to extremes of weather and to climate change will have to take into account the increase in vulnerabililty and value of resulting losses. It is projected by the insurers that the cost of losses is likely to continue to increase even if the changing climate does not to bring an increase in weather extremes. Climate change simply increases the risk of damage.

The insurance industry emphasizes the need to develop and plan strategies of mitigation and adaptation to respond to the challenge of reducing risk or vulnerability to these losses. More loss reduction research is needed.

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