iStock.com/Eric Bouchard

The parent company of Canada’s second-largest P&C insurer has posted an increase in insurance service expenses in the second quarter of 2025 compared to the year before, partially due to higher claims expenses from natural catastrophes.

Property and casualty insurance service expenses for Desjardins Group, the parent company of Desjardins General Insurance Group and its subsidiaries, increased to about $1.49 billion in the second quarter of 2025. That’s up $189 million, or 14.6% from 2024 Q2, according to Desjardins’ latest Management’s Discussion and Analysis (MD&A). Including ceded insurance service expenses of $20 million, the increase was $219 million, or 17.6%.

Desjardins partially attributes the increase in claims expenses to contrasts between 2025 Q2 and the corresponding quarter of 2024.

“The second quarter of 2025 was marked by three major events: water and wind damage in Ontario, wind damage in Québec and Ontario and a forest fire in Manitoba and Saskatchewan, while no catastrophes or major events occurred in the second quarter of 2024,” the MD&A says.

Although the MD&A does not outline the specific storms, Ontario and Quebec saw several events in the quarter, including:

  • The late-March, early April ice storm in the two provinces that resulted in $342 million in insured damage, according to initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ)
  • Severe thunderstorms and at least one confirmed EF-1 tornado in late April in Quebec
  • Wildfires in Manitoba and Saskatchewan. At one point, more than 17,000 were evacuated from Manitoba and 15,000 from Saskatchewan. Evacuations in Manitoba included all 5,000 residents of Flin Flon — one of four wildfire Cats this year, CatIQ confirmed to CU.

Desjardins says increased claims expenses in the second quarter of 2025 can also be attributed to the “less favourable impact of changes in prior year claims than in the comparable quarter of 2024, largely due to automobile insurance.” Another factor was the “unfavourable effect of the loss component on onerous contracts compared to a favourable effect in the corresponding quarter of 2024, mainly on account of higher losses and reversals of losses on onerous contracts in automobile insurance,” the MD&A says.

Desjardins’ P&C insurance segment posted $307 million in net surplus earnings, up $13 million from the same period last year. This was primarily due to higher insurance revenue, mainly from growth in auto and property insurance premiums and to business arising from the 2024 acquisition of The Insurance Company of Prince Edward Island.

Desjardins as a group is the second largest private P&C insurer in Canada by total insurance revenue, behind Intact, according to Canadian Underwriter’s 2025 Stats Guide. The numbers for Desjardins in CU’s Stats Guide represent the consolidated results of related companies that have common ownership but are not otherwise listed together under a parent company. For 2024, it had a 9.98% market share, with total insurance revenue of $10.4 billion.

Economic outlook

In its MD&A, Desjardins also offered commentary on its outlook for the economy.

“Due to several headwinds, the rest of the year looks much more challenging, and a sharp slowdown in growth is expected,” the MD&A says.

One headwind it points to is the trade war with the U.S., which has “negative consequences for real Canadian GDP.” That said, federal income tax cuts, combined with accelerated government spending on infrastructure and defence, should partially offset the negative effects.

For Québec specifically, economic activity is gradually beginning to slow. “As Québec is more exposed to trade tensions than the Canadian average, this vulnerability could result in virtually no real GDP growth in the spring and summer,” Desjardins warns.

However, several factors should mitigate the slowdown. For example, in the short term, public investment in infrastructure and future Hydro-Québec projects will help dampen the economic shock, especially in goods-producing sectors, Desjardins says.

Subscribe to our newsletters

Subscribe Subscribe

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.