Cole Burston/The Canadian Press
Janis Sarra, professor of law, University of British Columbia and principal co-investigator, Canada Climate Law Initiative
Climate change has become a prudential risk for Canadian insurance companies, requiring their attention as a fundamental business issue. Insurers are somewhat unique in that they have to manage climate-related risks on both sides of the balance sheet. On the asset side, insurers are significant investors and there are numerous risks to their portfolios as countries transition to net-zero carbon emissions. On the liabilities side, more frequent and severe wildfires, flooding, heatwaves and other acute and chronic events are increasing claims volumes while the probabilities of occurrence and severity of effects are becoming harder to price.