The Aon plc Spring 2025 Canadian Insurance Market Update says the Canadian property and casualty market has been remarkably resilient in the face of record natural catastrophe losses, remaining well-capitalized, with ample capacity and healthy competition.
They add that the underwriting environment remains cautious and disciplined. Premium increases and improved returns in recent years strengthened insurers’ positions, despite the fact that 2024 was the costliest year in Canadian history for catastrophe damage. “Canada remains an attractive market for London insurers, who are keen to grow their portfolios and offer competitive capacity,” Aon writes. “The availability of capacity and profitability is driving competition, creating opportunities for improved coverage and pricing.”
Globally, they add that capacity is adequate for most risks and continues to grow in targeted areas, although they say there is limited appetite for catastrophe-exposed and historically challenged risk profiles. The report discusses reinsurance saying in Canada, results were poor in 2024.
Although they warn that escalating catastrophic weather events, inflation and geopolitical uncertainty is making long-range market forecasting unpredictable, they say “loss trends and another year of increasing retentions will require primary insurers – especially personal lines carriers who took the brunt of 2024’s losses – to adjust their underwriting practices and pricing to manage heightened risk of natural disasters,” they write. “This could lead to higher premiums for policyholders and a more cautious approach to coverage offerings.”
