Severe weather events continue to reshape Canada's insurance landscape, with the industry warning that rising catastrophe losses are testing its capacity to respond.
According to new data from the Insurance Bureau of Canada (IBC), 2024 was the costliest year on record for insured losses caused by natural catastrophes, with more than $8 billion in claims and about 250,000 insurance claims filed nationwide. A five-week period over the summer proved particularly destructive, as floods, wildfires and hailstorms caused widespread damage across several provinces.
The volume of claims filed in 2024 represented a 443% increase over the 20-year average, significantly straining insurers’ claims departments. Despite the surge, IBC’s latest In Brief report, 2024 Summer of Catastrophe across Canada, shows that the majority of claims have already been resolved, reflecting the sector’s capacity to absorb record-breaking losses and help policyholders rebuild.
Data compiled by Catastrophe Indices and Quantification Inc. (CatIQ) reveal that 92% of claims from the July 2024 flash flooding in Toronto and southern Ontario have been closed, while 86% of claims from the August 2024 Calgary hailstorm — Canada’s costliest hail event at $3.2 billion —have been settled. In Quebec, 96% of claims linked to Hurricane Debby’s remnants have been resolved, with $2.8 billion in insured losses recorded, surpassing the 1998 ice storm as the province’s most expensive disaster.
Rebuilding efforts in Jasper, Alberta, where wildfires destroyed 358 properties, continue at a slower pace due to location and permitting challenges. One year later, 56% of related claims have been closed, consistent with previous large wildfire recoveries.
IBC said the industry’s response to 2024’s record losses demonstrates its ongoing commitment to recovery and its adaptability to Canada’s evolving risk landscape. However, the growing scale and frequency of catastrophic events are driving up claims costs and placing mounting pressure on the property and casualty (P&C) insurance market.
To manage these pressures, insurers have continued tightening underwriting standards and increasing premiums for high-risk regions, particularly those prone to wildfire, flooding and severe hail. Many carriers are also expanding reinsurance protection and revisiting their catastrophe models to account for new patterns of extreme weather. While these adjustments are aimed at preserving financial stability, they have contributed to rising costs and reduced availability of coverage for some homeowners in disaster-prone areas.
In its recent State of the Home Insurance Market report, IBC noted that while the market remains “healthy,” increasing weather-related losses threaten long-term affordability and availability of coverage. The bureau has renewed calls for the federal government to establish a national emergency management agency to coordinate disaster preparedness and recovery, a key recommendation within its Three-Point Resilience Plan.
IBC’s plan advocates for stronger national coordination to protect vulnerable communities, ensure the sustainability of the home insurance market, and mitigate the financial and emotional tolls of natural disasters as extreme weather becomes a fixture of Canada’s climate reality.
