Event: Great Ice Storm, 1998
Location: Montreal, Canada
Economic cost: $410m in Montreal, up to $3bn across Canada.
Description: Cold air and heavy rain froze on contact with surfaces during the six-day storm (4-10 January 1998), when Montreal experienced 80 hours of freezing rain and drizzle – twice its annual average.
Damage: 4.7 million people in Canada were left without power, some of them for several weeks, and physical damage was caused to properties and vehicles. Manufacturing, transportation, retail and agriculture all suffered. Damage to trees caused losses of $17.5m in the maple syrup industry, for example, and power cuts forced dairy producers to dump 13.5 million litres of milk worth $5.5m. About one-fifth of Canadian workers and production capacity was affected, and GDP was reduced by roughly 0.2% in the subsequent year as the economy recovered.
Insight: After the storm the Quebec government created a compensation scheme for evacuations lasting more than three days, although this has not replaced the role of insurers. Montreal’s power provider Hydro-Québec has bolstered its infrastructure and many households have reportedly invested in generators. However, insurance catastrophe experts agree that if the event recurred, direct physical damage to property and automobiles would not change.
Insurance solutions: The Lloyd's market offers cover in relation to Freeze. Examples of this include but are not limited to: Commercial property insurance, property catastrophe re/insurance, ILS products (eg collateralised reinsurance and catastrophe bonds), workers' compensation and other casualty products, product contamination, professional indemnity, business interruption and contingent business interruption.
Image: Damaged trees in Ottawa, Canada, during the Great Ice Storm of January 1998 (Getty Images)
Sources: Conference Board of Canada; Institute for Catastrophic Loss Reduction, Canada; National Climatic Data Center, US; RMS; Tree Canada