Cats spawn underwriting, claims handling reviews

Improving front-line risk assessment, especially around catastrophe-exposed assets, can reduce fraud and bolster long-term financial sustainability in the face of rising global reinsurance rates, experts said at the Ontario Insurance Adjuster Association’s 2025 Claims Conference.  

Thorough reviews of insured properties, stronger policy controls, and coordinated industry efforts to identify patterns of abuse, can help reduce unnecessary Cat exposures, experts said during a panel discussion on Emerging Trends and Challenges in the P&C Industry. 

For example, a trend is emerging where vehicles previously damaged in hail storms are involved in new hail claims — sometimes obscuring the fact that the damage originated from an earlier storm, says Andy Dykstra assistant vice president of enterprise fraud and investigative services at Co-operators. 

This creates the potential for the same hail damage to be claimed multiple times across different policies. 

For underwriters, this scenario underscores the need for stronger due diligence when evaluating vehicles or claims histories. 

“From an underwriting standpoint, [it’s about] recognizing that’s happening in some markets exposed to these chronic events, like hail, and having underwriting measures to more deeply evaluate what’s being written, [and what] might have been exposed,” he says.  

Existing tools can help underwriters manage their concentration. 

“I think there’s tools out there now that can help us be better at that,” says Erik Martensson, assistant vice president of supply chain and property claims at Aviva. “There are technologies coming to the forefront that do have better weather mapping, better concentration, better understanding of lots of the geographical factors that can impact [underwriting].” 

Or in Dykstra’s example of rising hail damage claims, “There are tools like Carfax…that give insight into prior claims, and that would be particularly important data to pay attention to [when] trying to mitigate exposure.” 

Gianna Aimola, vice president of claims at Allstate Canada, says there should be a similar scrutiny of how a company processes Cat claims, particularly in light of the escalating number of natural catastrophes in Canada.  

“Of the things that I think insurance companies can focus on and do better is, how do we get better at our Cat processes?” she poses. “That means rigour around making sure you have clear Cat plans and you have regular retros after every Cat event to make sure you understand where there are opportunities to improve efficiency.” 

Reinsurance rising

Identifying claims patterns and reviewing underwriting and claims handling processes is happening as reinsurance premiums and availability are tightening. 

“From a reinsurance perspective, this last summer was record-setting [for] catastrophes across Canada,” says Tracy MacDonald, president and CEO of Trillium Mutual. “The global reinsurance market is noticing, and that is causing problems, even if companies don’t have poor Cat experience.

“We’re experiencing significant, 30% to 50% increases in our Cat reinsurance premiums.” 

This puts significant pressure on insurers’ operational budgets.

“The money has to come from somewhere,” MacDonald says. If “you have to spend your budget on [rising] reinsurance premiums, it takes away from innovation. It takes away from technology.”