Severe weather cost Canadian insurers more than $2.4 billion in 2025, making it the 10th‑costliest year on record for insured catastrophe losses and adding urgency to mounting concerns over affordability and resilience in the property market.
Catastrophe Indices and Quantification Inc. (CatIQ) estimates that insured damage from storms, wildfires and floods reached $2.4 billion last year, the Insurance Bureau of Canada (IBC) said in a press release. That tally includes a late‑March ice storm in Ontario and Quebec, May wildfires in Flin Flon, Manitoba and La Ronge, Saskatchewan, a July hailstorm in Calgary, severe hail across the Prairies in August, and December floods linked to an atmospheric river in British Columbia.
Two decades ago, that number would have been unthinkable.
“Severe weather events continue to intensify. Two decades ago, insured losses seldom surpassed $500 million in a year. Today, annual costs exceeding $1 billion have become the norm,” said Celyeste Power, president and CEO at IBC. “This shift demands that we fundamentally rethink how we build, plan and restore communities across our country. The best way to keep communities safe and insurance widely available and affordable is to invest seriously in resilience now.”
The latest data underline how quickly the baseline has shifted. Between 2006 and 2015, Canada’s annual insured losses from catastrophic weather and wildfires totalled $14 billion (in 2025 dollars), according to IBC. Between 2016 and 2025, that figure jumped to $37 billion – nearly triple the previous decade – with the average number of claims almost doubling over the same period.
The 10 highest years for severe‑weather insured losses are all clustered in the past three decades, with 2024 topping the list at $9.4 billion on the back of the Calgary hailstorm, Jasper wildfire, remnants of Hurricane Debby and Greater Toronto Area floods. The Fort McMurray wildfire in 2016 ranks second at $6.5 billion.
Against that backdrop, industry leaders warn the numbers are not just a climate story – they are an access and affordability story.
“I have a real concern around access to insurance and affordability long term for the industry,” said SGI Canada COO Andrew Voroney in an earlier interview. “From a resiliency perspective, I don’t think we’re well-positioned to absorb long-term and ensure that we’re providing adequate access to insurance through affordability right now,” he said.
Insurers say the near‑term system remains manageable, but warn that simply passing higher costs through to policyholders via rate hikes will not be sustainable if severity and frequency continue to trend up.
“In the immediate term, it’s not something we can’t manage,” said Obaid Rahman, executive vice‑president, commercial insurance at Definity. “If climate change continues pushing the severity and frequency of events higher, which at this point is probable, then you have to start thinking about doing a bit more than just price for it,” he said.
“You end up in an affordability issue,” he said. “It just becomes too expensive.”
That tension is already visible in some high‑risk markets, where capacity has tightened and deductibles and terms have shifted in response to repeated catastrophe hits. Industry executives argue the alternative is to invest up front in reducing the scale of losses.
“You almost have to accept that these events will happen,” Rahman said. “You need infrastructure that is… able to withstand a certain amount of severity, which is going to keep on going up.”
That message echoes IBC’s call for governments to move from reactive disaster funding to proactive resilience.
“We must stop putting Canadians in harms way. As Canada embarks on a historic housing plan, investing in community and household resilience is significantly more cost-effective than paying to rebuild following every disaster,” Power said in the IBC release. “That’s why IBC and its members continue to urge governments at all levels to invest in infrastructure that defends against floods, adopt land-use planning rules that ensure homes are not built on flood plains, facilitate FireSmart initiatives in communities in high-risk wildfire zones, and implement long-delayed changes to building codes that better protect homes and livelihoods.”
For insurers, the growing loss burden is also reshaping how they talk about climate change with customers and policymakers.
“Climate change is here,” said Matthew Turack, group president of insurance at CAA Club Group. “We need to focus on how we can adapt to the changing climate, where we’re seeing more severe storms and more frequent events – and how we can be more resilient.”
While individual companies are tightening underwriting and investing in risk‑reduction programs, several executives stress that the scale of the challenge demands a more coordinated response.
“You need provincial governments, federal governments to do certain things,” Rahman said. “You need the insurance companies to do certain things… All those incentives change behaviour, but you need a much more coordinated and deliberate effort than right now.”
That includes decisions about where and how new housing is built, how critical infrastructure is upgraded, and how quickly modern building codes and FireSmart practices are adopted in high‑risk areas. Without that, insurers warn, the system will be stuck in a costly cycle of repeat damage and rebuilding.
Restoration specialists on the front lines are also watching the trend line warily. Jim Mandeville, senior vice president, large loss – North America at First Onsite Property Restoration, said earlier he is unsure how the next year will unfold in terms of natural catastrophes, but added that the pattern of larger, more complex losses is already evident on the ground.
The stakes are rising as Ottawa and the provinces move ahead with ambitious housing and infrastructure plans. Industry leaders argue that if resilience is not embedded into those investments, the figures in CatIQ’s loss tables will continue to climb – and more households and businesses will struggle to find and afford coverage.
For now, the 2025 tally of $2.4 billion is another data point in a trend Canadian insurers say they can no longer treat as exceptional.
“Climate change is here,” as Turack put it. The question for insurers, governments and property owners is how quickly they can move from absorbing the cost to reducing it.
