A rare breather on catastrophes may prove deceptive for Canadian insurers in 2026, with Crawford & Company (Canada) president Greg Smith (pictured) warning that economic strain and deferred maintenance could quietly push claim frequencies and severities higher even if the skies stay clear.
Looking ahead, Smith sees “two overarching trends” shaping the claims landscape this year: macroeconomic headwinds and the next phase of weather‑driven catastrophes. The first, he suggested, is already building.
Higher unemployment and persistent inflation are not abstract macro stories for claims teams, Smith argued – they show up directly in litigation behaviour, costs and settlement outcomes.
When economic conditions deteriorate, he said, those pressures “have a trickle‑down impact in the claim space, affecting litigation behavior, affecting their costs, and ultimately creating the potential to increase the severity of claim settlements across the industry.”
One area he is watching closely is opportunistic fraud. The underlying risk is always present – policyholders inflating the value of an otherwise legitimate loss – but financial strain can make it more tempting.
“We see a soft trend when there’s increasing economic difficulties where policyholders experience significant financial strain,” Smith said, adding that “the potential for inflated losses tends to increase” in those conditions. That, in turn, demands “stronger investigation discipline and some more analytics” to both prevent and detect inflated claims and bring settlements “back to what the policy was intended to cover.”
Smith expects a similar dynamic to play out on the commercial side, though it may look less like fraud and more like an aggressive use of coverage. When revenues shrink and margins tighten, he said, some insureds will start reporting smaller losses that, in better times, would simply have been absorbed as an operating cost.
During periods of stronger financial results, many companies “might just pay these out of their revenues through the normal course of business,” he noted. But when they are “trying to turn around their financial results,” those smaller, fully covered claims are more likely to be pushed to the carrier “for investigation and settlement.”
At the same time, pricing trends are changing the math on how much risk is retained. After years of higher deductibles and self‑insured retentions in response to rising premiums, Smith is seeing that the pendulum is beginning to swing back.
“We’re also seeing some rates soften in the commercial insurance market,” he said. Deductibles and retentions “that have gone up in recent years as premiums have increased are now starting to come back down through the renewal cycles,” a shift that will also contribute to “smaller losses getting reported” under commercial policies.
Another byproduct of financial stress is simply not spending on upkeep. For both personal and commercial insureds, Smith sees deferred maintenance as a quiet, but important, contributor to higher claim counts.
Whether it is a home, an automobile or a factory, failing to keep assets “in a state of good repair” has “the potential to cause more claims to occur,” he said. That can be anything from skipped routine maintenance to “shovelling snow [to] ensure safe walkways,” with seemingly minor omissions accumulating into “a slight increase in the number of claims” filed.
Taken together, those economic factors – more opportunistic fraud, a greater willingness to report smaller losses, lower retentions and reduced maintenance – are, in Smith’s view, likely to “begin to emerge and become more prevalent in the insurance claim space” as 2026 unfolds.
The second major trend Smith is focused on is weather. By recent standards, 2025 was unusually calm.
“We’ve been fortunate in Canada and across North America to have had a pretty benign weather pattern,” he said. For insurers still digesting “record-setting catastrophes in 2024,” the lull has delivered “much needed relief” and a chance for “the whole industry to catch their breath.”
The risk, Smith suggested, is that a quiet year encourages people to relax. He is intent on avoiding that.
One of the things Crawford is “always conscious of,” he said, is not letting “a level of complacency creep into our mindsets,” but instead using the current weather pattern “to spend that time pre‑planning and preparing so that we are able to launch an effective cat response if and when those losses occur.”
For Smith, preparation goes far beyond having adjusters on standby. It includes “strong computer connectivity between customers and their service providers,” resilient call centre capacity, and ensuring that partners such as content evaluators and contractor networks are ready to “work together and work with tremendous efficiency” when a large‑scale event hits.
