Professional services firm, Aon plc has published its Spring 2023 Canadian Insurance Market Update. “The report finds that despite economic volatility, catastrophic climate events, supply chain and labour challenges and geopolitical uncertainty, the market has proved remarkable resiliency,” they write. “Economic uncertainty, costly reinsurance capacity and accelerated frequency and severity of climate events has nevertheless required insurers to remain strategic about the capacity being deployed. The focus on risk quality will be top of mind for insurers.”
They find that the Canadian property and casualty (P&C) market ended 2022 with a combined ratio of 85.44 per cent. They add that reinsurance rates, following challenging reinsurance treaty renewals, has also impacted the Canadian P&C market, “causing more strain on pricing and capacity for primary insurers.” The researchers continue, examining key trends across multiple business lines and in reinsurance in some depth.
Under catastrophic loss activity, they discuss the catastrophic events which unfolded in May 2022 – both Hurricane Fiona and the derecho which hit Ontario and Quebec occurred in the same month – making 2022 the third worst year in history for catastrophic losses in Canada. They add that secondary perils remain a concern in reinsurance. “Although major events caused considerable insured damage in recent years, approximately 94 per cent of Canadian losses from 2008 – 2022 were from secondary perils,” they write.
