CANADA – flooding in Calgary and Toronto June 2013

  • In June 2013, severe floods devastated the City of Calgary in the Canadian province of Alberta.
  • They were caused by unusually heavy rains combined with the melting ice cap from the Rocky Mountains, the result of which was that the Bow and Elbow Rivers burst their banks simultaneously.
  • The floods were declared by the Provincial Government to be the worst in Alberta’s history.
  • Five people were killed and a further 100,000 were displaced by the flooding.
  • Huge damage was sustained to high-profile sites such as the Calgary Zoo and the Scotiabank Saddledome, home to the Calgary Flames Ice Hockey Team.
  • Furthermore, in July 2013, there was a massive sewage back-up in Toronto which caused extensive flooding throughout the region.
  • It was immediately apparent that both these multi-million dollar CAT events would result in a high volume of complex commercial and domestic claims.

FCL appointed to oversee claims arising from both events…

  • After initial consultations with our Managing Director, Bev FitzGerald, FCL was appointed by a leading UK based insurer to oversee the handling of both the CAT events.
  • FCL Director Gerald Williams flew to Calgary to conduct initial site inspections, whilst Graeme Shurben, also an FCL Director, went to Toronto to commence file audit reviews and provide managerial assistance at the highest level.

FCL took control…

  • By deploying teams of experienced adjusters to assess the scope and complexity of the damage.
  • By conducting detailed inspections of the damage sustained at the ‘Top 10’ sites.
  • By liaising with reinsurers and by producing high-quality presentations and reports to insurers, enabling them to keep abreast of developments and manage their personnel.
  • By preparing cash-flow forecasts for re-insurers to ensure they were always aware of the extent of their potential liabilities.
  • By negotiating various cost-saving measures with external contractors.
  • By liaising with the client’s own Claims Examiners to assess and monitor the work of independent adjusters and ensure that claims were handled as quickly and professionally as possible.
  • By conducting file audit reviews and assessing the validity of reserves.
  • By providing an independent audit report highlighting technical issues.
  • Broducing a unified, cross-functional financial management reporting ‘pack’, to ensure
    smooth working between all the parties.

And managed both events…

  • Achieving early and smooth reimbursement of funds from reinsurers, either in advance or, on major loss cases, simultaneously to payments being made to policyholders.
  • Ensuring that reinstatement works were carried out as quickly and as efficiently as possible, thereby minimising potential business interruption losses and providing a huge morale boost to the City.
  • Making sure that Canadian regulatory controls were strictly adhered to and ‘best practise’ was achieved in all procedures.
  • Ensuring that all budgetary and financial concerns were treated in a transparent way and that costs were minimised wherever possible.
  • Maintaining excellent working relationships with all parties.

Illustrated by…

  • The manner in which the most high-profile site to be damaged, the Scotiabank Saddledome (which is the principle indoor arena in Calgary and home to the hugely popular ice hockey team, the Calgary Flames) was handled.
  • As well as hosting the Calgary Flames’ home games, the 20,000 seat arena regularly stages concerts and other prestigious events, with acts like Bruce Springsteen and Rod Stewart having performed there in the past.
  • Ensuring that both the external and internal reinstatement works were carried out as quickly and smoothly as possible was crucial as the potential Business Interruption losses were huge and far reaching. Due to it’s profile, the site was subject to intense media scrutiny which proved to be a crucial factor in determining the public’s perception of the manner in which the insurance industry was handling the disaster.
  • Under FCL’s supervision, the reinstatement works were carried out phenomenally quickly, with the arena opening in time for the beginning of the ice hockey season in September, just over two months after the floods occurred.
  • This was a significant boost to public morale as well as for the client.

And hailed as a tremendous success by the Market because…

  • FCL deployed all the experience and expertise gained from managing previous CAT events, to provide the Market with authoritative reassurance that the losses were in good hands and demonstrating that excellent settlements could be achieved without the need for recourse to litigation.
  • FCL contributed to the smooth recovery of one of the worst natural disasters in Canada’s recent history.
  • FCL proved that they have the resources required to work on more than one CAT at a time, as the work in Canada occurred whilst a similar assignment was being progressed in New Zealand following extensive earthquake damage.