Insurance Marketplace Realities 2025 – Canada property

Rate predictions: Canada property

	Trend	Range
Non-catastrophe exposed		-5% to +5%
Catastrophe exposed		+10% to +20%

Insurers maintain heightened focus on natural catastrophe perils

• Following the flooding in Quebec in early August from the remnants of Hurricane Debby and flash flooding in Southern Ontario in July, we can anticipate that insurers will manage flood capacity for assets in Ontario and Quebec.
• Wildfire and hail claims continue to cause catastrophic losses in Western Canada; however, these claims are not subject to aggregated limits or increased % of loss deductibles as are earthquake and flood. We anticipate insurers will charge for and manage capacity deployed in Western Canada, noting the increased frequency and severity of losses in this region.
• When this section was initially submitted, the 2024 Gulf of Mexico hurricane season had been relatively mild; we anticipated that would likely help insurers with their upcoming 2025 reinsurance treaty renewals. Since then, Hurricane Helene has had a devastating impact in the Southeastern U.S. This may have an impact on the 2025 reinsurance treaty renewals and potentially drive rates at the key 1/1/2025 date as loss quantums from this event develop.

Increased competition for quality risks

• Insurers will compete for insureds with low natural catastrophe exposure and good loss histories, which will drive rate reductions to -5% (and perhaps lower depending on the amount of alternate market competition). Insurers are feeling pressure to maintain premium levels in an increasingly competitive marketplace, and they are offering more capacity and competing on risks to maintain and grow overall premium levels.
• We expect capacity in the Canadian market in 2025 to remain as per 2024. Additional market capacity from both incumbent markets deploying more capacity plus new market entrants, including managing general agents, bringing new capacity into the market (backed by stable reinsurance), should keep capacity levels at current levels.
• Loss control and site surveys remain important for insurers to write a risk. Some underwriters will not come onto a risk without updated engineering — or will make a site survey a subjectivity to come on risk. Quality engineering also helps insurers to deploy their maximum capacity, meet target premium and/or consider alternate terms such as lower deductibles and increased sublimits.

Insurers looking to differentiate themselves

• Insurers are developing solutions for challenging risks, such as wood frame residential property and emerging technologies to diversify their offering to brokers and insureds. With the backing of reinsurance, they are emboldened to take on risks they would not have a few years ago during the harder market.
• To maintain and grow premium levels, insurers are diversifying into industry sectors they have not historically written. They are doing this by poaching underwriters from competitors that have specific expertise, or by slowly building their books through excess attachments.
• Insurers are also looking to non-traditional insurance solutions to support and/or enhance their traditional property offerings, such as fronting for global programs, captives and parametric solutions.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).