Can Canada keep expecting steady reinsurance renewals? 

Even though Canada faced its biggest loss year on record in 2024, it didn’t have a meaningful impact on property reinsurance renewals, said panellists at Canadian Underwriter’s Economic Outlook 2025 webinar. 

That outlook should hold for the upcoming 2025 renewals, unless Canada faces another high-loss year. That’s because losses would be competing with the record-breaking wildfires in Los Angeles from this January, which approximated $38 billion in losses, according to Fitch Ratings.  

“I think it would be fair to say that we picked a good year to have a bad year,” says Alister Campbell, president and CEO of the Property and Casualty Insurance Compensation Corporation. “Canada’s primary insurers were very lucky to have an outstanding panel of very robust and well-capitalized reinsurers. 

“So far, there is no reason to believe that the upcoming renewal season is going to be particularly problematic for Canada, but it’d probably be ideal if we did not produce another 2024 in 2025,” he says.  

Insurers paid around $9 billion in claims costs, a large part from four major summer catastrophes in July and August 2024, according to figures from Catastrophe Indices and Quantification Inc. 

“Somewhere around half of that total loss was absorbed by the reinsurance market,” says Campbell. “Canadian primary insurers turned out to be well-reinsured, and that helped cover the scale of the losses.” 

It also helped that the reinsurance market has been softening for the last 18 to 24 months, producing renewal rates that are a far cry from the record-high renewals Canadian P&C insurers faced in 2023. 

Despite heavy losses south of the border, panellists predict Canada won’t face another awful reinsurance renewal season like the one P&C insurers experienced in 2023 — where property reinsurance rates increase 25% to 30% for portfolios without losses, while other portfolios with losses saw their reinsurance rate increases climb as high as 50% to 70%. 

“Although the California wildfire estimate is just mind-boggling…and it was so early in the year…it was more of an earnings event than a capital event,” says Denise Hall, managing director and Canadian specialty broking leader at Aon. “We’re cautiously optimistic for the reinsurance renewals come 2026.” 

When it comes to earnings, the U.S. P&C industry recorded a US$1.1 billion net underwriting loss in the first three months of 2025, attributable to the January 2025 California wildfires. That’s down from a $9.4 billion gain recorded in the prior year period, according to an AM Best report. A 2.4% increase in net investment income earned did little to offset the underwriting loss. 

Point of view

Despite reinsurance treaties performing as expected, there’s a contrast between the financial strain consumers are feeling and the resilience of some insurers who have invested in risk management and diversifying their portfolios.  

Last year’s NatCat loss year had an uneven impact between personal and commercial lines, with Canadian households feeling the strain more than their business counterparts, says Colette Taylor, EVP and chief operating officer at Sovereign Insurance. 

At the same time, insurance companies generally saw strong financial results. Canadian P&C insurers reported a combined profit of $4.13 billion by the end of 2024, according to data from the Office of the Superintendent of Financial Institutions. 

Those results are “bolstered by those insurers who are now getting pretty savvy at recognizing the best way to ensure levels of profitability is to have a really diversified portfolio,” says Taylor.  

But as Canadians deal with a cost-of-living crisis, and inflated premiums or reduced capacity for products like car insurers, that’s a juxtaposition that insureds might not understand, says Taylor. 

“The tools that we have at our fingertips now, from an analytics perspective around NatCat, certainly can point us in the direction of what is going to be more favourable to insureds.”