A new report from Statistics Canada is drawing attention to the property and casualty (P&C) industry’s challenges in the past six years. These challenges, the report’s author notes, are “driven by an intensification in extreme weather events, uptick in automobile thefts and building and repair costs rising due to input costs and wages.”

Entitled Extreme weather impacts on consumers and insurers in Canada, December 2019 to December 2025: An updated analysis, the report’s author, Statistics Canada economist, Marisa McGillivray notes that during the study period, insurance premiums for home and mortgage insurance increased 45 per cent while passenger vehicle insurance premiums increased 23.9 per cent, both outpacing the all-items Consumer Price Index, which was up 21 per cent over the same period.

She adds that rates have consistently outpaced all-items inflation over time and that underinsurance poses a significant risk for homeowners. The report also adds that the five-year increase in homeowners’ home insurance prices from December 2020 to December 2025 is not unusually large.

Uninsured costs are rising

In a look at flooding, wildfire trends, convective storms, hurricane risk and earthquake risk, it also notes that uninsured costs are significant and rising. “It’s estimated that for every $1 of insured costs there are $2 to $4 of uninsured costs,” she writes, adding that aging and deteriorating infrastructure represents a compounding risk.

“In 2026 the Canadian Climate Institute estimated that $4-billion in annual proactive infrastructure adaptation could yield $5-billion to $10-billion in avoided costs.”

The paper also notes that insurance expenses, affected by claims costs, have grown over the last six years: “Total P&C claims and expenses grew to $74.9-billion in 2025, up 50.1 per cent from 2020 and 12.3 per cent from 2023,” they add. “Despite extreme weather in 2025 being moderate in comparison to 2024, total claims and expenses were marginally higher in 2025 than in 2024.”

It concludes by advocating for consumers, insurers and government to work in tandem to build solutions. She notes insurers’ use of artificial intelligence in pricing and product development, but also notes that much development of alternative coverages applies to commercial risks.

“Insurers are innovating by using AI risk pricing models, offering CAT bonds for specific perils and looking to alternative products such as parametric insurance, however much of this applies to commercial risks,” she writes. “Innovation works best in collaboration with adaptation and resilience measures, such as building back better initiatives and home retrofits, updated building standards and improved land use planning. As well as enhanced Disaster Financial Assistance Arrangements and a national flood insurance program.”