INSURANCE COVERAGE KEY TO FINANCIAL RESILIENCE AS CLIMATE RISKS RISE: REPORT

GUELPH, ON, Feb. 6, 2025 /CNW/ - A new report from the Financial Resilience Institute (Institute) reveals that nearly half (47%) of Canadian households feel they lack sufficient insurance coverage to protect against unexpected events, despite a clear correlation between reported adequate insurance and improved household financial resilience. The study, enabled by grant funding from Co-operators, also reveals a jump in the number of Canadians unable to access help understanding the financial implications of extreme weather, rising from 3% in February 2023 to 7.6% in June 2024.

The number of Canadians impacted by extreme weather events is only increasing. Insurance Protection as a Pathway to Improved Financial Resilience and Financial Well-Being, published by the Institute, highlights that one in five Canadian households report being impacted by extreme weather events, such as extreme heat, floods, or fires in the last two years. These households are also more financially vulnerable, based on their mean Financial Resilience Score, than those that have not experienced such an event.

"Our report and Financial Resilience Index model provide the first data-driven evidence demonstrating the clear link between adequate insurance protection and improved levels of financial resilience and financial well-being," said Eloise Duncan, CEO and Founder of the Financial Resilience Institute and author of the report. "The insights serve as a call to action for the insurance industry and other leaders to initiate or accelerate their work to help improve the financial health and well-being of Canadians."

Households who reported having sufficient insurance protection scored an average of 15 Index points higher on the Institute's Financial Resilience Index model, with 66% scored as, 'Approaching Resilience' or 'Financially Resilient', compared to 40% of those who report they lack sufficient insurance protection ^[1}.

Co-operators – the fourth largest Property and Casualty insurer in Canada – is also recognized as a leader in fostering financial resilience. Aligned with its purpose as a co-operative insurer and financial services provider, Co-operators champions the findings of the report as a driver facilitating its commitment to help clients measurably improve their financial health and well-being.

"Canadians and our communities need more support and preparation to become financially resilient to the effects of increasingly intense and severe weather events amidst other challenging economic factors," says Rob Wesseling, President and CEO, Co-operators. "This transformative Index will enable us to measure our clients' ability to withstand financial hardships and stressors and inform the solutions we create that help to better prepare them and that catalyze a resilient future for all Canadians."

With Canada warming twice as fast as the global average, the risk of intense and frequent wildfires is growing. The country had its most destructive wildfire season ever in 2023, more than doubling the previous record, according to Natural Resources Canada, and affecting a wide swath of provinces including Alberta, Quebec, Nova Scotia, and B.C.

On the other end of the spectrum, the recent polar vortex that gripped much of the country – with temperatures plummeting to -40°C in some regions – underscored the risk of costly winter-related damage to homes. These events serve as stark reminders of the increasing need for comprehensive insurance protection.

With extreme weather events on the rise, proactive planning is more critical than ever. Canadians should discuss their insurance needs with their provider to understand the risks and explore options that support pre-emptive mitigation efforts, such as funding for weather-resistant home upgrades. Building a resilient future requires a collaborative whole-of-society approach, and informed insurance decisions are a crucial first step.

About Financial Resilience Institute

Financial Resilience Institute is a non-profit organization and the leading independent authority on financial well-being in Canada, working to help improve the financial resilience, health and well-being of all Canadians and global citizens, and in particular more those who are more financially vulnerable or underserved. The Institute also recently released its free financial resilience score tool and bank of resources for Canadians, and its publicly available Financial Well-Being Index Model. The Institute partners with financial institutions, policymakers, employers and innovators in Canada and globally to develop and implement evidence-based solutions that improve financial resilience, health and well-being for all. For more information, please visit: www.finresilienceinstitute.org

About Co-operators

Co–operators is a leading Canadian financial services co-operative, offering multi-line insurance and investment products, services, and personalized advice to help Canadians build their financial strength and security. Co–operators has more than $64 billion in assets under administration and has been providing trusted guidance to Canadians since 1945. The organization is well known for its community involvement and its commitment to sustainability. Currently a carbon neutral organization, Co–operators is committed to net-zero emissions in its operations and investments by 2040, and 2050, respectively. Co–operators is also ranked as a Corporate Knights' Best 50 Corporate Citizen in Canada. For more information, please visit: www.cooperators.ca

About the Financial Resilience Index Model and Financial Well-Being Studies

^[1] The proprietary Seymour Financial Resilience Index ® measures household financial resilience, i.e. your ability to get through financial hardship, stressors and shocks as a result of unplanned life events, across nine behavioural sentiment and resilience indicators. Households are scored from 0 to 100, with 'Extremely Vulnerable' having a financial resilience score of 0 to 30, 'Financially Vulnerable' a score of '30.01 to 50, 'Approaching Resilience' a score of 50.01 to 70 and 'Financially Resilient' a score of 70.01 to 100. The first Index of its kind in the world, it measures household financial resilience in Canada at the national, provincial, and individual levels, backed by over ten years of data and with a pre-pandemic baseline of February 2020. Index data is updated every four months and based on a representative sample of population with 2524 survey respondents in October 2024; 6218 in June 2024; 6223 in February 2024 and 5010 in February 2023; from a representative sample of the population by household income, age, province and gender. The Index has been peer-reviewed by Statistics Canada, UN-PRB, C.D. Howe Institute, Co-operators, Haver Analytics and Financial Institutions and other organizations using it. It is complemented by the Financial Well-Being studies instrument (2017-2025) and has applications in other countries. More information about the Index indicators, scoring model and development methodology are available at: https://www.finresilienceinstitute.org/indicators-and-scoring-model/

SOURCE Financial Resilience Institute