Oldwick, N.J.-based A.M. Best Co. says it does not expect “asignificant number of rating actions” resulting from insurancelosses from recent flooding in Alberta, Canada.

Meanwhile, Moody's Rating Service says the event is creditnegative for insurers because the losses “will adversely affecttheir quarterly earnings.”

Estimates put damage from the worst flooding in Canada at C$3billion to $5 billion in economic damage and insured losses ofbetween C$2.25 billion and $3.75 billion (U.S. $2.14 billion to$3.57 billion).

Canada does not offer national flood insurance and fewhomeowners have coverage because of affordability. Both Best andMoody's say they expect losses primarily in commercial lines and auto.

Moody's says losses for the country's P&C insurers willdepend on the level of exposure to the worst affected areas ofsouthern Alberta. The losses could support price increases goinginto 2014 and might prompt the Canadian government to introduce agovernment-backed flood insurance program for homeowners because ofthe uninsured losses.

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

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

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

Up to this point, Best says, the largest loss event in Canada interms of insured losses was a January 1998 ice storm in easternCanada that cost the insurance industry C$1.5 billion and flashflooding in Quebec in 1996 that cost insurers a similaramount.