Competing on Climate Change: An interprovincial, longitudinal review of emerging environmental risks to Canadian homeowners

Abstract

In an era of accelerated climate change, Canadian homeowners face growing financial exposures to environmental risks, and climate-related property damage now represents the largest aggregate cause of losses in the global insurance industry (Mills, 2012, p. 1424). This study presents data regarding hydrological, meteorological, and wildfire disasters occurring in Canadian provinces from 1970 to 2010. The rising incidence of natural disasters suggests that natural disasters are affecting an increasing number of Canadians across all provinces. In light of this data, the researcher recommends that Canadian insurers implement a “4-C” strategy to help reduce the human impact of future natural disasters: (1) Coaching local communities to adapt to climate change; (2) Consensus-building around common consumer risks; (3) Collaborating with governments to protect against catastrophic losses; and (4) Cooperating with consumers to co-insure frequent events. Finally, it is recommended that risk capital be invested carefully and sustainably, so that the 4-Cs is customized to address emerging challenges specific to each climate zone.