Alberta insurance rates to rise as Fort McMurray fire expected to be costliest disaster in Canadian history

, Canada

A devastated neighbourhood is shown in Fort McMurray, Alta., on Friday, May 13, 2016.

CALGARY – Insurance rates in Alberta are likely to rise again, continuing an upward trend following costly natural disasters, following the devastating fire that burned through Fort McMurray.

Alberta fires may be worse for Canadian insurance companies than Hurricane Katrina was for U.S.

Intact Financial Corp. may post insured losses of as much as $1.1 billion (US$850 million) from the wildfires in Alberta, which could dent the Canadian economy harder than Hurricane Katrina hit the U.S. Continue reading.

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A report released Friday by credit ratings agency Standard and Poor’s predicted that insurance rates in Alberta would increase following the fire, in part because there are more catastrophic losses claimed in Alberta from natural disasters than in other provinces.

The agency released a list of the 10 most expensive catastrophes in Canadian history, and events in Alberta make up seven spots on the list.

“The (Fort McMurray fire), in our opinion, would likely continue to reinforce the trend of rate increases, particularly for insured risks in Alberta more than other provinces,” Standard and Poor’s analyst Hardeep Manku wrote in a report published Friday.

The agency also predicted that the fire in Fort McMurray would be the most expensive insurance event in Canadian history, but insurance companies would be able to absorb the losses and make money in the long run, even though claims from the inferno would likely surpass the total bill for the Calgary and area flooding in 2013 and the Quebec ice storm of 1998.

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