Canada’s insurance sector is entering 2026 under a collision of pressures that SGI Canada COO Andrew Voroney (pictured) describes as the most complex the industry has faced in years – and he warns that affordability, not capacity, may become the country’s defining insurance crisis.
“The market continues to be as complicated as it ever has,” Voroney told Insurance Business. “There’s just a convergence of so many different things that are happening.”
He expects that affordability will continue to deteriorate in 2026 – particularly in personal lines – while commercial pricing is expected to remain soft well into next year. At the same time, the rapid acceleration of AI is poised to disrupt insurers’ long-term technology strategies, even as climate-driven losses keep breaking records and political pressure on the industry intensifies.
And while Canada is unlikely to face a California-style withdrawal of insurers, Voroney said the long-term threat is no less serious.
For nearly a decade, Canadian insurers have invested heavily in modern policy systems, new core platforms, and multi-year digital overhauls. Now, that entire roadmap is being shaken by the rapid acceleration of artificial intelligence.
“It almost seems like a number of the technologies that are being looked at or adopted are now being shaken up with the introduction of AI,” Voroney said. “You have to look at that through a completely different lens.”
Insurers have spent years – and in some cases hundreds of millions – building toward technology that is already being overtaken. AI now threatens to shorten the lifespan of systems still being deployed.
“It’s really exciting, but it’s definitely a change of pace or a new direction for most of us in the industry,” he said.
Severe-weather events continue to “break records year over year,” and the impacts are cascading well beyond claims ratios.
“I have a real concern around access to insurance and affordability long term for the industry,” Voroney said.
Homeowners in particular are feeling the strain, he said, adding that "it’s more obvious on the personal lines.”
Auto severity, catastrophes, and rising property claims are driving household premiums up faster than incomes – a gap that is turning insurance into a political flashpoint.
“People didn’t use to talk about insurance,” Voroney said. “Now it’s talked about all the time, and it’s even part of political platforms.”
Regulators and industry leaders increasingly compare Canada’s risk outlook to the United States, where wildfires have triggered a capacity crisis. Voroney agrees that Canada’s diverse geography helps prevent a similar systemic failure – at least for now.
“We’re still a pretty diverse country in terms of the risks – hail, wildfires, ice storms,” he said. Crucially, insurers have the necessary pricing flexibility to sustainably cover these risks, allowing them to operate profitably, he added.
“Even if there was a major event in a major centre, I think the industry is well-poised to absorb that.”
But he said the real threat is not sudden withdrawal – it is the slow, grinding deterioration of affordability.
“From a resiliency perspective, I don’t think we’re well-positioned to absorb [this] in the long term and ensure that we’re providing adequate access to insurance through affordability right now,” he said.
Right now, Canada is leaning almost entirely on premium increases to compensate for rising risk.
"There’s only so much you can do through pricing," he warned.
To stabilize the system, Voroney said Canada needs a comprehensive resilience strategy – one that reshapes development, strengthens infrastructure, and prepares communities before losses occur.
“It’s not insurers’ jobs. It’s not an industry job. It’s not even a government job. It’s a societal problem,” he said.
While homeowners face tightening conditions, commercial clients remain in a soft market cycle – a dynamic Voroney expects to continue well into next year.
“I think we probably have another year or so of that, at least,” he said.
Hard-market profitability attracted new entrants, increasing capacity just as personal lines profitability weakened.
The result: a bifurcated market where commercial remains competitive and soft, and personal lines remain tight and sensitive.
Voroney said the earliest indicator of hardening will appear quietly in insurer data long before it’s visible to brokers.
“You do see it in the trends, in just the premium-per-policy trends,” he said. “You start noticing it level out and start to grow again.”
He said insurers will also begin issuing more declines and tightening underwriting rules – and that the shift often “sneaks up” on the market.
