Insured losses from the May wildfires in Fort McMurray, Alberta, are expected to total C$3.58 billion ($2.76 billion), making it the costliest-ever Canadian natural disaster, an insurance industry group said on Thursday.
The losses far exceed those from the Alberta floods of 2013, which cost about C$1.7 billion in claims, the Insurance Bureau of Canada (IBC) said in a report.
It noted that the biggest previous insurance loss from a wildfire had been C$700 million from one in Slave Lake, Alberta, in 2011.
The wildfires in the oil sands hub of Fort McMurray forced the evacuation of some 90,000 residents, shuttered numerous oil sands operations and cut Canada’s crude output by more than 1 million barrels a day.
While most of the oil sands operations have returned to normal rates, rebuilding efforts for thousands of homes in Fort McMurray, along with the insurance payout, are expected to take months or even years.
“In terms of a timeline, it really depends on how long the rebuilding process takes,” said Bill Adams, an IBC vice president.
Adams added that in the Slave Lake wildfire, it took nearly two years to rebuild some 400 homes destroyed. But Fort McMurray, where more than 2,400 properties were destroyed, represents an “unprecedented challenge.”
A study compiled by Catastrophe Indices and Quantification Inc. said there were more than 27,000 personal property claims, with the average claim of C$81,000.
The losses are not expected to change dramatically over time.
Seven of the largest 10 Canadian natural disasters for insurable losses occurred in Alberta, IBC said.
The Fort McMurray payout is expected to affect some of the largest Canadian insurers. Intact Financial Corp, Canada’s largest property and casualty insurer, said earlier that it would suffer losses ranging from C$130 million and C$160 million.
“The larger impact might be on the reinsurance business,” said Jaeme Gloyn, an analyst at the National Bank Financial.
($1 = 1.2986 Canadian dollars)
(Additional reporting by Matt Scuffham in Toronto, Editing by Jeffrey Benkoe and Tom Brown)