Canadian Insurers Push Owners to Fortify Homes, Urge Carney to Prioritize Climate Risks

Why It Matters

The clash highlights how climate risk is becoming a profitability and solvency issue for insurers, pressuring policymakers to embed resilience into Canada’s housing strategy.

Key Takeaways

• Insurers urge fire‑proofing as premiums rose 6% in 2023
• Canadian P&C sector net income jumped 57% despite climate losses
• Record 2024 claims hit C$9.4 billion (~$7 billion) across wildfires, floods, hail
• Government plans 3.9 million homes, many in high‑risk flood and fire zones
• Insurers offer discounts for fire‑resistant roofing and flood‑risk assessments

Pulse Analysis

Canada’s insurance market is confronting a perfect storm of climate extremes and fiscal pressure. With nearly 10% of the world’s forest cover, the country has experienced record‑breaking wildfires and floods, driving insured catastrophic losses to C$58.4 billion (about $43 billion) since 1998. The latest year alone saw claims total C$9.4 billion, roughly $7 billion, as blazes in Jasper, hail in Calgary and floods in Toronto battered communities. Insurers such as Intact, TD, Wawanesa and Definity are therefore pressing homeowners to adopt fire‑ and flood‑resilient measures, leveraging premium hikes and discount incentives to shift risk mitigation onto policyholders.

Despite the surge in climate‑related payouts, Canada’s property‑and‑casualty sector posted a robust 56.7% rise in net income, underscoring strong capital buffers and disciplined underwriting. Companies have invested millions in risk‑modeling tools, partnered with municipalities, and integrated resilience upgrades into claim settlements. Discount programs reward fire‑resistant roofing, siding and flood‑risk assessments, while industry proposals to Ottawa call for updated building codes, natural infrastructure funding, and restrictions on new builds in high‑risk areas. These initiatives aim to curb future loss exposure and preserve profitability in an increasingly volatile environment.

Policy makers face a critical crossroads as Prime Minister Mark Carney balances housing shortages with climate preparedness. The federal plan to construct 3.9 million homes could place up to 500,000 units in flood‑prone zones and 200,000 in wildfire‑vulnerable areas, amplifying potential losses. Insurers argue that without stricter codes and public investment, the gap between exposure and mitigation will widen, threatening both consumer affordability and insurer solvency. Aligning housing policy with climate resilience is becoming essential for the stability of Canada’s insurance industry and the broader economy.