Waves of severe thunderstorms in the U.S. during the first half of this year led to $34 billion US in insured losses, an unprecedented level of financial damage in such a short time, according to Swiss Re Group, as climate change contributes to the frequency and severity of violent meteorological events.
Damages from convective storms in the U.S., those that can come with hail, lightning, heavy rain and high winds, accounted for nearly 70 per cent of the $50 billion US in global catastrophic damages so far this year, the reinsurer said Wednesday. Those global figures include earthquakes in Turkey and Syria.
The storms in the U.S. were so severe, there were 10 that resulted in damages of $1 billion US or more, almost double the average recorded over the past decade, according to Swiss Re, and Texas was the state most severely effected.
“The effects of climate change can already be seen in certain perils like heatwaves, droughts, floods and extreme precipitation,” Swiss Re Group Chief Economist Jerome Jean Haegeli said in a prepared statement. “Besides the impact of climate change, land use planning in more exposed coastal and riverine areas, and urban sprawl into the wilderness, generate a hard-to-revert combination of high value exposure in higher-risk environments.”
There have been a multitude of high-profile meteorological events to start the second half of the year including heatwaves in the U.S., storms and floods across Canada, northwestern China and southern Europe, and wildfires on Greek islands, Italy and in Algeria.
Damages and insurance losses from those events are still being tallied, Swiss Re said.
The figures for the first half of the year are in line with a report last month from another reinsurer, Munich Re, which said the series of thunderstorms that raked Texas in June was the most expensive single event in the U.S. for the year so far. The overall loss from those storms alone is estimated at approximately $8.4 billion US.
“Devastating storms, which now seem to be the norm rather than the exception, are expected to continue to grow in intensity and severity,” wrote Marcus Winter, CEO, North America at Munich Reinsurance America.
Still cleaning up from Hurricane Fiona 8 months later
Evidence of Hurricane Fiona are everywhere in Glace Bay, N.S., nearly eight months after the storm hit. Many homes haven’t been repaired or rebuilt because disaster relief hasn’t arrived, or because there are no contractors available to do the work.
Winter said that it is “imperative” to act immediately in preparing communities for the “physical and financial risks of future climate-related weather events.”
Reinsurers are the insurance industry’s insurers, covering losses that could upend an individual company. Munich Re and Swiss Re have operations across the globe, including the U.S.
Kerry Symons is a businessman and the mayor of Perryton, a town of about 8,500 in the Texas Panhandle, one of the communities struck by a tornado in June. Three of his buildings were damaged and destroyed, including a furniture store. He also lost some vehicles.
Symons said he is like most residents in Perrytown in that he is still arguing with insurance companies. Some residents have sought his assistance as mayor.
“There’s not a whole lot we can do for them as a city,” he explained.
Perryton Mayor Kerry Symons, in red, clearing debris from a trailer park in Perrytown in Texas in June. The town was walloped by a massive storm that month, one of many to have been hit by an increasing volume of violent storms. (David Erickson/The Associated Press)
One lesson Symons has learned from the ordeal is the importance of an annual accounting for the cost of what is inside a building and what it would cost to rebuild. One of his buildings, a furniture store, was acquired recently so the valuation was easy. Another building that he has owned for 20 years has proved more difficult.
The increasing frequency of extreme weather has created disruptions within the insurance industry and some insurers have retreated from states that are getting hit hard, such as Florida and California.
The pullback by insurers is happening despite years of skyrocketing premiums for property owners in hard hit states.
State Farm and Allstate have pulled back from California’s home insurance market, saying that increasing wildfire risk and soaring construction costs mean they’ll no longer write new policies in the nation’s most populous state.
Last month Travelers said catastrophe losses doubled in its most recent quarter and the company, considered a bellwether for the insurance industry due to its size, said it lost money.
AAA has said that it will not renew “a very small percentage” of homeowners and auto insurance policies in hurricane-wracked Florida, joining other insurers in limiting their exposure in the Sunshine State despite efforts by lawmakers to calm the volatile insurance market.
AAA insists it’s not leaving Florida, but that last year’s devastating hurricane season had led to an unprecedented rise in reinsurance rates, making it more costly to operate there.
Florida has struggled to maintain stability in the state insurance market since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining insurers anxious about writing or renewing policies in Florida. Risks for carriers have also been growing as climate change increases the strength of hurricanes and the intensity of rainstorms.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
