The Cost of Catastrophe

Why It Matters

Rising catastrophe losses are forcing Canadian insurers and brokers to overhaul pricing, capacity, and risk‑mitigation strategies, directly affecting the cost and availability of property coverage for businesses.

Key Takeaways

• Canada’s insured weather losses hit $6.29 bn in 2024.
• Severe convective storms now top property loss drivers, surpassing hurricanes.
• Insurers keep pricing competitive despite rising catastrophe frequency.
• Brokers push clients toward risk mitigation, higher deductibles, and captives.
• Advanced analytics and modeling become essential for underwriting and capacity decisions.

Summary

The panel titled “The Cost of Catastrophe” examined Canada’s unprecedented insured weather losses, which reached $6.29 billion in 2024 – roughly three times the 2023 figure and the highest on record. Participants from Marsh, Gallagher, FM Affiliated and AON discussed how the surge in severe convective storms, now the leading property loss driver, is reshaping the market.

Across the discussion, speakers noted that despite the spike in losses, the reinsurance market remains competitive, keeping premiums relatively flat and capacity abundant. Insurers are focusing on refined exposure identification, higher deductibles, layered programs, and the use of modern analytics to price risk more accurately. Brokers are urging clients to adopt engineering solutions, climate‑resilient designs, and proactive mitigation to preserve insurability.

Cheryl Pollicelli highlighted a shift toward “more layers, higher deductibles, and captives” as tools to control exposure, while Kiara Dahuna pointed to the emergence of hail in Calgary and intensified wildfire threats in Toronto as new underwriting challenges. Damian Eckleton emphasized that improved cat‑modeling tools now allow insurers to pinpoint vulnerable geographies and advise capital‑expenditure priorities.

The consensus is clear: data‑driven risk management and early client communication are becoming essential for maintaining affordable coverage in a market where a single large catastrophe can reset pricing. Companies that invest in mitigation and transparent exposure reporting are likely to secure better terms and sustain long‑term resilience.

Original Description

How extreme weather is rewriting insurance