Moody's says losses for the country's P&C insurers will depend on the level of exposure to the worst affected areas of southern Alberta. The losses could support price increases going into 2014 and might prompt the Canadian government to introduce a government-backed flood insurance program for homeowners because of the uninsured losses.

Moody's highlighted two carriers—Intact Insurance Group, and AIG Canada (formerly Chartis)—as well-capitalized and for “their effective use of reinsurance to mitigate risk.”

Intact, Canada's largest insurer, holds the lion's share of the personal auto market and stands one percentage point behind the leader, AIG Canada, in its share of the commercial property market. However, Moody's raised questions about other insurers saying their capital could erode if they failed to obtain enough reinsurance.

Best, however, says the Canadian insurers are well positioned from a capital standpoint to absorb estimated losses “and underlying performance trends remain favorable.” Best put insured losses in the range of C$1 billion to $3.75 billion. While there is a “scarcity of property coverage for flooding in Canada” and claims are expected to be low, “this event appears likely to rank among Canada's largest catastrophe losses.”

Up to this point, Best says, the largest loss event in Canada in terms of insured losses was a January 1998 ice storm in eastern Canada that cost the insurance industry C$1.5 billion and flash flooding in Quebec in 1996 that cost insurers a similar amount.