Permafrost thaw may be Canada’s most overlooked climate risk – and insurance leaders say it won’t stay in the background for long.
Speaking on a climate risk panel in Toronto, Andrew Voroney (pictured centre left), EVP and COO at SGI Canada, pointed to the vast footprint of frozen ground underlying the country’s north and many remote communities.
Permafrost affects roughly half of Canada’s landmass, and in many areas entire towns and critical infrastructure are built on ground that was never meant to move. For now, the insurance conversation is dominated by flood and wildfire. But Voroney warned permafrost belongs in the “when, not if” category.
He noted that while current insured losses are limited, the structural risk is baked in.
Asked which perils are most underinsured today, the panel initially stayed with familiar territory: flood, wildfire and earthquake. Voroney put flood at the top of the list, particularly ahead of a long-awaited federal flood program, while also flagging quake as a major economic threat.
Then he brought up permafrost as a fast-emerging concern.
From an insurance perspective, the exposures are very different from riverine flood or interface wildfire. Thaw can undermine foundations, buckle roads, distort pipelines and gradually destabilize entire neighbourhoods. Losses may not come as one headline-grabbing catastrophe, but as a steady accumulation of structural damage, habitability questions and expensive repairs.
That pattern makes it harder to quantify, harder to underwrite, and harder for governments and communities to plan around – especially when the science is still evolving and the time horizon stretches well beyond a typical one-year policy.
For Urs Uhlmann (pictured right), managing director of global corporate and specialty at Aviva Canada, the warning signs are already visible overseas.
Uhlmann, who is originally from Switzerland, referenced recent events in the Alps, where warming temperatures and permafrost melt have triggered destructive landslides.
He noted that entire villages have been affected as mountain slopes destabilize, with climate-driven thaw acting as the underlying trigger. While Canada’s exposure looks different – less alpine, more northern and sub-Arctic – he suggested the dynamic is similar: infrastructure and communities built on an assumption that the ground would stay frozen indefinitely.
Permafrost’s impact in Canada may not mirror European landslides, but the panel agreed it is unlikely to remain a theoretical risk. As temperatures rise, slow-moving ground failure, drainage changes and slope instability could begin to surface as a tangible insurance issue.
For now, the panel stressed that Canada is still in the realm of affordability, not outright uninsurability.
“I think we’re still in a place in Canada where it’s unaffordable, not uninsurable,” Voroney said, speaking more broadly about climate-exposed risks. Canadian insurers still have the regulatory flexibility to price for risk; the challenge is whether households and small businesses can absorb those prices.
Sarah Robson (pictured centre right), president and CEO of Marsh Canada, added that insurance “only works while extreme weather remains natural risk.” Once losses become near-certain rather than probabilistic, she cautioned, coverage can quickly tip from expensive to unavailable.
Permafrost fits uneasily into that framework. In some regions, structural damage from thaw is closer to inevitability than chance – but raising prices to fully reflect that reality risks making coverage unusable, or pushing communities toward abandonment.
Uhlmann argued that pricing still has a critical role to play. Without a functioning risk-based price signal, he said, governments and owners have little guidance on where to invest in mitigation or how to prioritise relocation, retrofits and new construction standards.
Making permafrost insurable on a sustainable basis will depend heavily on data and modelling.
Robson called for better “data quality and exposure transparency,” not just for traditional perils but across the climate spectrum. She pointed to regulatory efforts such as OSFI’s B-15 guideline on climate risk and stress testing as early steps in the right direction, while acknowledging that much of this work is still geared toward supervision rather than frontline pricing.
For permafrost, that means understanding where thaw is most likely, which assets sit in those zones, how fast the ground is changing, and what kinds of failure modes are most probable. It also means integrating that science into longer-term capital and planning decisions – something that is especially difficult when policyholders renew annually but hold assets for decades.
The panelists also stressed that permafrost cannot be treated in isolation. It intersects with wildfire (through northern communities and access routes), with flood (as ground settlement alters drainage) and with broader questions about where Canadians live and work in a warming climate.
Even as they highlighted permafrost as a future flashpoint, the panelists were equally focused on what is already happening: more frequent, smaller-to-mid-sized catastrophes.
Asked whether they were more concerned about rising severity or rising frequency of NatCat events heading into 2026, Uhlmann didn’t hesitate.
“It’s frequency for us, for sure,” he said. In 2024, Aviva experienced four major catastrophe events across the country in a matter of weeks. Each loss was manageable on its own, but together they strained both claims operations and annual results.
Voroney agreed that frequency complicates reinsurance and capital planning in ways a single large event does not. Programs designed around one or two big shocks are now being tested by a drumbeat of smaller events that repeatedly erode retention layers and admin capacity.
