How insurers bankrolled their $7.7 billion bill this year
Canada’s insurance industry was rocked in 2024 by $7.7 billion in insured losses—more than double last years. Yet, even as insurers face rising costs from climate-driven disasters, they continue to support fossil fuels, the very driver of these catastrophes. The industry has yet to fully address this glaring contradiction. So, let’s take a closer look at how this plays out at three of Canada’s largest publicly traded insurers: Intact, Fairfax, and Definity.
Intact Financial Corporation
As Canada’s largest property and casualty insurer, this summer Intact reported $1.2 billion in catastrophe losses. How are they addressing climate risk? Intact has committed to achieving net zero financed emissions in its own investment portfolio by 2050. But this commitment falls short of covering all its emissions, notably excluding those associated with its insurance portfolio and potential third-party asset management business.
As of Q1 2024, Intact still held $736 million in fossil fuel investments, with no investment exclusions in place. The company has made promising exclusion policies for underwriting Arctic oil and gas, stand-alone oil sands accounts, thermal coal mining, and certain coal-powered utilities. Though to truly align with net zero, Intact needs to commit to halt financing of fossil fuel expansion.
Other major insurers like Allianz have committed to halting funding for fossil fuel expansion in both their underwriting and investment portfolios, recognizing that new fossil fuel projects are incompatible with a net zero future. A firm commitment by Intact to stop insuring and financing fossil fuel expansion would not only bolster its net zero strategy but also position the company as a responsible leader in Canada’s insurance sector.
Fairfax Financial Holdings
Fairfax reported $587 million in catastrophe losses just this summer, but its approach to climate risks stands in stark contrast to its peers. Recently named the fifth largest underwriter of fossil fuels globally, Fairfax has no net-zero target, no transition plan, and no comprehensive emissions reporting.
The company has over $1.5 billion invested in fossil fuels. Fairfax’s subsidiaries also underwrite major fossil fuel projects, with only limited coal exclusions from one subsidiary, Allied World. While Fairfax acknowledges climate change as a material risk, it remains an outlier within the global financial industry, failing to adopt even baseline commitments to align with net-zero goals.
Definity Financial Corporation
Definity sustained $218 million in catastrophe losses in Q3 2024. On the investment side, Definity has made a net-zero commitment and excluded thermal coal mining from its portfolio. However, with $300 million still invested in fossil fuels and no engagement policy for high-emitting investees, its progress remains limited.
Economical Group, a Definity subsidiary, is known to offer specialty oil and gas coverage, and Definity has no underwriting exclusions for fossil fuels or net-zero commitment for its insurance portfolio.
The common thread
These three insurers—Intact, Fairfax, and Definity—offer a microcosm of the insurance industry’s broader dilemma. Each recognizes the financial toll of climate change, yet all remain financially supportive of the fossil fuel projects fueling it.
Investors are watching closely. Shareholders have increasing leverage to demand credible net-zero strategies and regulators have tools to push the industry toward accountability.
