As Canada’s insurance industry heads further into 2026, the outlook for claims is less about a surge in frequency and more about rising complexity. According to David Crozier (pictured), president and managing director of Markel Canada, the forces shaping claims today are increasingly legal, technological and behavioural – particularly on the liability side.
“Property is not a stagnant set of risks, but it’s more predictable,” Crozier said. Liability, by contrast, evolves through changes in jurisprudence, regulation and how claimants pursue recovery.
That distinction matters as insurers prepare for a claims environment influenced by social inflation, litigation funding, emerging exclusions and a rapidly changing cyber threat landscape.
At a high level, Crozier said the Canadian liability environment remains relatively stable. Courts are predictable, and Canada has not experienced the same level of volatility seen in some US jurisdictions. Still, underlying pressures are building.
Social inflation remains a key concern, driven by rising incomes, higher healthcare costs and increasing expectations around compensation. Those forces are influencing both settlement behaviour and court outcomes.
“We are seeing an increase in the number of people testing litigation where they might have settled in the past,” Crozier said, with more cases proceeding to trial rather than resolving early.
He also noted a modest uptick in interest around class actions, as claimants actively seek out others with similar grievances. While not yet widespread, it signals a shift in how liability claims may develop.
One of the most significant emerging themes for 2026 is the growing presence of litigation funding in Canada. Long established in the United States, the model – often backed by private equity – allows third parties to finance lawsuits in exchange for a portion of any eventual settlement or judgment.
That dynamic, Crozier explained, alters incentives. Claimants who might previously have abandoned a case or accepted a settlement now have the financial backing to pursue litigation further.
“You could see an increase in the amount of litigation, a lengthening of the time for litigation, and an increase in the verdicts,” he said.
While litigation funding can improve access to justice, Crozier cautioned that it can also inflate outcomes and extend disputes, raising costs for defendants and insurers alike.
Underwriters, meanwhile, remain disciplined as they assess emerging liability exposures. One notable development is the growing prevalence of exclusions for PFAS, often referred to as “forever chemicals,” reflecting greater societal and regulatory awareness of their long-term health and environmental impacts.
Wildfire liability is another area attracting attention, particularly at the director and officer level. Beyond physical damage, decision-making around preparedness and response is increasingly scrutinized.
“As a director or officer… am I making decisions, or failing to make decisions, that make a wildfire response more difficult?” Crozier said.
He pointed to recent US litigation tied to major wildfires as a cautionary example of how liability can escalate when critical infrastructure and governance decisions are questioned.
While Canadian liability conditions remain comparatively steady, Crozier warned that companies with exposure to the US market face a very different reality. The US casualty market remains hard, shaped by nuclear verdicts, challenging legal venues and rising claim severity.
“Anyone who has exposure to the US is still seeing that impact,” he said, including higher rates, reduced availability of coverage and tighter underwriting.
For Canadian insurers and brokers, that cross-border risk continues to complicate program design and pricing as 2026 unfolds.
Cyber risk remains one of the most dynamic areas of claims activity, though Crozier said the market is showing signs of stabilization after years of volatility. Increased capacity and underwriting discipline have softened pricing, but the threat environment continues to evolve.
Ransomware remains the leading cause of loss, but geopolitical shifts are pushing threat actors toward sabotage and disruption rather than simple data theft. Artificial intelligence is accelerating that evolution.
“AI is a force multiplier,” Crozier said – not only for businesses, but for hackers as well.
He pointed to the first confirmed uses of AI in cyberattack campaigns in 2025, noting that while claims data is still limited, the implications are clear. AI is enabling more convincing social engineering, faster reconnaissance and increasingly sophisticated deepfakes.
As consumers grow accustomed to interacting with automated systems, Crozier said it becomes harder to distinguish legitimate communications from malicious ones – a trend that could drive new forms of cyber loss.
Taken together, these forces suggest that claims in 2026 will demand more than traditional response mechanisms. Speed, expertise and preventative services are becoming as important as coverage itself, particularly in cyber and complex liability scenarios.
“It’s not all about coverage,” Crozier said. “It is about services… about speed of response.”
For insurers and brokers, the challenge will be managing rising complexity while maintaining affordability – and helping clients understand that risk management increasingly begins long before a claim is filed.
As 2026 unfolds, Canadian claims may remain relatively stable in volume, but the pathways to loss – and the cost of resolving it – are becoming more intricate than ever.
