Special feature

Climate change and increasing physical risk

As climate change redefines the risks that communities are exposed to, we think beyond insurance protection, expanding our focus into physical risk reduction and loss prevention, at both the household and community levels. Bringing our expertise to bear, we are modelling climate risks, adapting our products, and advising our clients on how they can build resilience.

Read the full special feature on climate change (pdf)

A year of climate perils

Canada experienced a wide variety of climate events in 2023: the worst wildfire season in recorded history, severe hail and windstorms, and spring flooding events. With total climate-related insured losses of $3.1 billion, the trend is increasing in frequency and severity. With communities bearing the brunt of climate risk, we – as risk experts – can guide Canadians toward resiliency.

A nation on fire

Without a doubt, wildfire topped the climate-risk radar for our country in 2023, with extreme heat, drought and convection storms coalescing into a wildfire season that shattered records in terms of number of wildfires and area burned. According to Natural Resources Canada, more than 6,600 wildfires had burned a staggering 18.4 million hectares of land by the end of 2023 – an area larger than Greece and more than double that of the previous Canadian record. In a normal wildfire season, an average of 2.5 million hectares of land are consumed in Canada.

Co-operators clients submitted $61.3 million in wildfire-related claims. In 2023, the devastation, disruption and climate anxiety felt by communities, from coast to coast to coast, were a resounding wake-up call – in Canada and globally – that more needs to be done to build resilience in the face of rapidly rising risks.

Supporting community-led efforts to reduce wildfire risk, we’ve been partnering (since 2005) with FireSmart Canada, the Institute for Catastrophic Loss Reduction, and the National Fire Protection Association on Wildfire Community Preparedness Day projects and wildfire-prevention activities. In 2023, we supported 230 communities across 10 provinces and two territories (with the exception of Nunavut), helping these communities promote measures that homeowners can take to reduce wildfire risk. This represents a notable increase in community applications and awards.

Wind, hail and convection storms

Severe thunderstorms, tornadoes, derechoes and hailstorms continue to impact Canadians, with concentrated events often carrying large financial and emotional costs. In 2023, Co-operators clients submitted $68.3 million in claims due to wind, hail or convection storms.

Flooding events

We saw significant wind and flooding in early 2023, during a widespread rain event that covered the areas of Ontario and Quebec. This single rainfall resulted in $23.5 million in claims submitted by clients across the regions. In addition, flooding related to summer rainfall events in Halifax, Quebec and Ontario resulted in more than $24.6 million in claims submitted.

Modelling the future to protect the present

Through our Climatic Hazards and Advanced Risk Modelling (CHARM) team, we are developing and using sophisticated risk models to understand our exposure to climate-related risks like floods and wildfires, plan for the financial impact of climate-related scenarios, and inform decisions related to how we design and deliver our insurance products.

Photo of Eliot Gregoire

“As we become better at modelling the impact of future scenarios, we are better equipped to plan, prepare for, and prevent climate-related risk. As a result, we’re better able to tailor solutions to an individual household’s climate risk and protect their financial security.”

Eliot Gregoire
Senior Manager, Climate Hazards and Advanced Risk Modelling