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A series of severe windstorms in Canada drive majority of the economic cost of natural perils in 2018
Aon Insights

A series of severe windstorms in Canada drive majority of the economic cost of natural perils in 2018


Aon launches its Weather, Climate & Catastrophe Insight: 2018 Annual Report, which evaluates the impact of global natural disaster events to identify trends, manage volatility and enhance resilience.

Globally, the report reveals that 394 natural catastrophe events in 2018 generated economic losses of USD225 billion. Of that total, private sector and government-sponsored insurance programs covered USD90 billion of the total – the fourth-highest year on record. This means the protection gap, which is the portion of economic losses not covered by insurance, was 60 percent and at its lowest level since 2005.

Total claims payouts topped USD475 million in Canada

Canada was not spared in 2018. David Sloan, President & Chief Executive Officer of Aon’s Reinsurance Solutions business in Canada, commented. “For the second year running, the country suffered a frequency of mid-sized losses which could cost close to CAD2 billion (USD1.5 billion) with only a relatively small proportion being reinsured. The costliest was a powerful May series of windstorms that swept from southwest Ontario through the city of Toronto and across Eastern Ontario into Quebec. The total claims payouts topped CAD600 million (USD475 million).”


In late September, a series of tornadoes swept through Ontario and Quebec. This included a high-end EF3 tornado that left considerable damage in the city of Gatineau. Another EF2 tornado caused widespread damage in the Nepean region of Ottawa. Total insured losses from that outbreak topped USD235 million. Other notable Canadian events in 2018 included a flash flood event in Toronto (August), a large hailstorm in Calgary (August), and severe thunderstorms in Saskatchewan and Manitoba (June).

“A major portion of the cost was directly tied to a series of thunderstorm outbreaks resulting in damage from either straight-line winds, hail, or tornadoes, in Canada, added Sloan. Winter weather and drought were the only other perils with above average and median payouts.”

Catastrophe risk continues to evolve

Steve Bowen, Director and Meteorologist at Aon’s Impact Forecasting team, said that among the takeaways from the events of 2018 was the recognition that catastrophe risk continues to evolve. “The complex combination of socioeconomics, shifts in population and exposure into vulnerable locations, plus a changing climate contributing to more volatile weather patterns, is forcing new conversations to sufficiently handle the need for mitigation and resilience measures. Natural disasters are always going to occur. How well we prepare can and will play a key role in future event losses.”