P&C insurers’ Top 3 priorities for 2026

Shepherding auto reforms in Ontario and Alberta, advancing a national solution for earthquake risk, and reducing red tape are the Top 3 priorities for property and casualty insurers in 2026.

Auto reforms

“In 2026, the industry faces the unique challenge of implementing two major sets of auto insurance reforms – one in Alberta and one in Ontario,” IBC CEO Celyeste Power says in an IBC website post revealing the industry trade organization’s three areas of focus this year.

Alberta is transitioning to the Care First system effective Jan. 1, 2027. A core feature of the proposed new no-fault system is to pay out set amounts of accident benefits to injured drivers, while severely limiting claimants’ ability to sue other drivers to recover their health care costs.

“These reforms represent a significant win for Alberta drivers, and there is considerable pressure to get the transition right,” Power says. “The government still needs to finalize several details, and IBC will continue working closely with the province to help ensure the reforms deliver the results that Albertans deserve.

“Over the next year, the industry will also focus on the practical work required to implement a new product: system upgrades, staff training, catastrophic claim management, and consumer education.”

In Ontario, beginning July 1, 2026, drivers will move to an updated auto insurance system intended to give drivers more choice about coverage.

Certain benefits that are now mandatory – including income replacement, non-earner benefits and caregiver benefits – will become optional in the new system. The theory is that consumers can tailor coverage to their needs, allowing them to save money by not purchasing coverage they do not want or use.

“Many Ontarians already receive these benefits through workplace plans or other coverage, meaning they may not need to purchase them through their auto insurance policy,” IBC says of the reforms.

Ontario brokers have warned many consumers may not understand what their options are, let alone the impact of not picking up certain auto coverages. They have also conducted a study showing consumer savings may amount to no more than $100 on their policies, even if they drop most of the optional coverages.

The Insurance Brokers Association of Ontario (IBAO), the Insurance Institute of Canada, and the Ontario Mutual Insurance Association (OMIA) have all collaborated to create a free, two-hour online course available to train all industry professionals about the reforms.

Additionally, “this spring, IBC and [IBAO] will launch a consumer education campaign to help Ontarians make informed decisions about the coverage that best meets their needs,” Power says.

Earthquake risk

Insurers plan to follow-up on a short reference to earthquake risk in the federal government’s 2025 budget.

Released last November, the budget states: “More can…be done to ensure Canadian consumers are protected by a resilient financial system in the face of extreme events like earthquakes. Budget 2025 announces the government’s intention to consult federally regulated property and casualty insurers and other interested stakeholders on ways to ensure the stability of Canada’s insurance sector in an extreme earthquake event.”

Modelling by P&C insurers shows a strong earthquake in British Columbia could threaten the financial stability of more than one Canadian P&C insurance company, particularly if such a quake was followed by strong aftershocks.

IBC has called for the federal government to establish a government quake backstop, which would limit the risk for the private P&C insurance industry, allowing them to lower pricing for quake deductibles and the prices for quake insurance.

“Fortunately, the federal government has clearly signalled a willingness to advance a solution to earthquake risk,” IBC says. “In the 2025 budget, a single but significant sentence commits Ottawa to begin consultations that aim to ‘ensure the stability of Canada’s insurance sector’ when an extreme earthquake hits.

“The government recently announced an earthquake early warning system in Montreal and Ottawa, reinforcing the possibility of a significant earthquake and underscoring our country’s need to be ready.”

Reducing red tape

Finally, insurers are looking to reduce the cost of regulatory compliance.

“Eighty-one per cent,” IBC says. “This is how much regulatory compliance costs have increased across Canada’s property and casualty insurance sector in just two years (2022–24), according to IBC’s new Regulatory Compliance Cost Survey.” Reducing the regulatory cost burden would allow insurance companies to be more productive, and let them contribute more to the growth of the Canadian economy, IBC argues.