Toronto-Dominion Bank , Canada’s second-largest lender, said it will take a third-quarter charge after tax of C$418 million ($406 million) due to recent severe weather in Alberta and Ontario and to boost its reserves for auto insurance claims.

The weather-related hit on TD’s insurance and mortgage lending business was largely shrugged off by investors and analysts as a widely expected one-time expense. But its move to strengthen reserves on auto insurance claims suggested the business may not be as profitable as the bank would like.

Competitors, including Royal Bank of Canada, Bank of Nova Scotia and Canadian Imperial Bank of Commerce, are also expected to take an insurance hit in the third quarter due to flooding and storms, but TD has the largest home and auto insurance business of the big banks.

Shares in TD, which routinely notches up quarterly profit near the C$1.72 billion recorded in the second quarter, were down 1.6 percent in early afternoon trade at C$87.43, while the other Canadian bank shares were mixed.

TD said the charges, which hit both its insurance and its Canadian banking units, will result in an after-tax net loss of between C$240 million and C$290 million in its wealth and insurance business in the third quarter.

Excluding the charges, third-quarter insurance earnings are estimated to be in the range of C$130 million to C$180 million after tax, it said.

The third-quarter charges are broken down in three categories, two of which reflect estimated claims for evacuation and home and auto damage due to severe storms in southern Alberta on June 20 and in the Toronto area on July 8.

TD said it would take weather-related insurance charges of C$125 million after tax, which impact its insurance profits, and C$93 million for provisions in mortgage lending due to the Alberta flood, an indirect consequence of the weather which hits its Personal and Commercial banking profits.

Floods in the Western Canadian province of Alberta in June shut down the country’s oil capital, Calgary, displaced more than 100,000 people and left many without power for days.

In Toronto, a severe rainstorm this month caused flooding, power cuts and transit chaos.

Canadian Pacific Railway’s second-quarter also suffered due to the floods and insurer Intact Financial warned last week that quarterly results would be hurt by weather-related claims.

TD’s remaining C$292 million after-tax charge is for increased reserves against claims in its auto insurance business, which is the area analysts focused on.

The Toronto-based bank had already increased its auto insurance reserves in the fourth quarter of 2012 in response to auto insurance reforms in Ontario, Canada’s most populous province. But it said it needs to further strengthen reserves to deal with rising third-party bodily injury claims and fraud.

“The Ontario auto insurance market has presented a significant challenge to our business,” Chief Executive Officer Ed Clark said in a statement.

The business earned C$360 million a year earlier.

“(The charge) raises questions about Ontario pricing adequacy, what changes TD may make in how it serves the Ontario auto insurance market and whether there could be further strengthening of reserves,” Desjardins analyst Michael Goldberg wrote in a research note.

Ontario’s Liberal government has proposed at 15-percent cut to average auto insurance rates in Canada’s most populous province, a move considered widely popular with voters, but which has angered auto insurers.