How Canada’s P&C insurers showed their resilience in 2024

In 2024, Canada’s property and casualty (P&C) insurance sector was beaten up by inflation and economic uncertainty, record-setting auto theft, and a mind-blowing year for Cat losses, among other challenges.

And yet, as the Property and Casualty Insurance Compensation Corporation (PACICC) often points out, despite its ups and downs, the sector hasn’t experienced the loss of a company in quite some time (more than two decades, as per the industry guarantee fund’s latest annual report).

Not every country enjoys the same stability in its insurance sector.

“Some 26 of the 38 countries in the [Organisation for Economic Co-operation and Development] have experienced the failure of an insurance company since 2011. PACICC calculates that across the 38 OECD nations, it would be normal for 1.33 (P&C and life) insurers to fail each year for every 1,000 insurance companies.

“This means that, on average, insurance industry stakeholders should expect that, each year, one or two insurers will fail somewhere among OECD nations. The comparable insolvency rate for Canada over this period is 0.4 failed insurers for every 1,000 insurance companies.”

PACICC notes insolvency risk is lower in Canada than in other OECD nations due to consistent and stable profitability and strong regulatory oversight. This doesn’t mean we’ll never see another failure again, but our system works well to temper the risk of an insolvency occurring.

Drilling down

Canada’s P&C insurance industry ended 2024 with a net income of more than $12 billion, up four points over 2023, despite heavy Cat losses and other pressures, as MSA Research figures show.

With about $1.2 billion added in other comprehensive income (notably from reinsurance contracts), total industry comprehensive income came in at $13.2 billion. A strong investment return of almost $9 billion (up nearly 30% year-over-year) contributed greatly to the strong result.

The industry’s combined insurance service ratio (CISR, a somewhat simplified version of the combined ratio), measures the relationship between a carrier’s earned premiums and its expenses, including claims, underwriting costs and reinsurance. The 2024 CISR was up over the previous year, to 92.3% (91.1% for 2023). MSA notes the net combined ratio (fully discounted) reached 95.1%, up from 92.9% the previous year.

Return on equity came in at a decent 15.4%, down about a point from the year prior. But given the Cats experienced in 2024, insurers will accept it with open arms.

Moving forward

Looking ahead, insurers are adopting a cautious yet optimistic approach.

Premium growth is expected to continue, with low double-digit increases in personal auto and property lines, and mid-single-digit growth in commercial and specialty lines. However, the industry remains vigilant about potential challenges, including global political tensions and the ongoing impacts of climate-related events.

So, while 2024 brought Canada’s P&C insurers significant challenges, their strong financial performance and strategic responses position them well to navigate an evolving landscape in 2025 and beyond.

Glenn McGillivray is managing director at the Institute for Catastrophic Loss Reduction. This article is excerpted from one that appeared in the June-July, 2025 print edition of Canadian Underwriter.