Severe weather pushes up claims, personal premiums 

Nearly one-third — or 29% — of claims processed in the last 10 years were due to major catastrophic weather or climate events, according to in-house data from Allstate Insurance Company of Canada. 

What’s more, Allstate’s data show the frequency and severity of natural catastrophe claims is increasing. Last year, large-scale NatCat events generated the most claims in a decade — approximately 2.4 times more than in 2023, the insurer reports. 

As Cat losses surge, Canadians feel ill-prepared. Only 27% of Canadian homeowners say they are very confident their home is prepared for a major weather or climate event, according to a recent Allstate poll conducted by Léger.  

The impact of extreme weather in 2024 was unprecedented. For the first time in Canadian history, insured damage caused by severe weather events in 2024 surpassed $8 billion, according to Catastrophe Indices and Quantification Inc. (CatIQ). 

By year-end, storms, fires, and floods had triggered more than 273,000 insurance claims — 188% higher than the historic average for total claims in any given year, data from the Insurance Bureau of Canada shows. 

Rate increases underscore the magnitude of catastrophic weather in Canada last year, Hub International data shows.  

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“Due to the most catastrophic year Canada has ever seen impacting personal lines property and ongoing challenges in Alberta and Ontario, premiums have increased for personal property and auto at +5 to +10%,” Hub’s Q1 rate perspective reads. 

Cats don’t appear to have had the same impact on commercial insurance rates. For example, despite record-breaking Cat losses last year, 2025 Q1 rates remain “competitive to flat” at –5% for middle-market commercial businesses in Canada, as Hub reports.  

“Some commercial lines of business and coverages that saw sharp increases in previous years, such as select property risks and cyber are stabilizing, and in some cases, rates are decreasing,” Hub writes. “Greater insurer competition in commercial lines is helping with rate stabilization/reduction.” 

External pressures add to uncertainty, costs 

Beyond weather-driven losses, broader economic and geopolitical factors are also creating headwinds for the industry. 

“Ongoing economic, litigation and political challenges could impact rates in all lines going forward,” Hub writes.  

Plus tariffs, supply chain issues, and regulatory shifts in the U.S., Canada and Mexico could increase claims costs and pricing uncertainty, says Hub.  

“Any significant legislative or regulatory changes, such as tariffs, could drive up replacement and rebuilding costs in catastrophe-prone areas, which would impact property valuations and contribute to further property insurance rate instability.” 

Alyssa DiSabatino

Alyssa Di Sabatino has been a reporter for Canadian Underwriter since 2021, covering industry trends, market developments, and emerging risks.