What severe NatCats mean for future deductibles and premiums

Last year was nothing short of remarkable, although not in a good way, for the Canadian insurance industry.

Catastrophe Indices and Quantification Inc. (CatIQ) confirmed $9.1 billion in catastrophe claims — an all-time record by a wide margin.

The second-costliest year, 2016, lagged by a significant amount ($4.9 billion in 2016 dollars, or $6.2 billion in 2025 dollars using the Bank of Canada’s inflation calculator). Last summer, four large events occurred in less than 30 days, with major losses in Toronto (flood), Jasper (wildfire), Calgary (hail) and Montreal (flood). CatIQ declared a total of 12 disasters in 2024.

The mantra, ‘location, location, location’ applies to disaster losses just as much as it does to real estate valuations.

All four large events last year underscore the escalating financial risks posed by severe weather events in Canada. The increasing frequency and severity of such incidents exert immense pressure on insurance premiums and may influence insurers’ willingness to operate in high-risk areas.

One question being asked is whether hail in Calgary and surrounding areas is moving away from something unforeseen, and toward a loss driver that’s becoming too common to insure — more like a property maintenance issue.

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Regardless, the impact on insurance companies and consumers is immense.

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Global insurers just had the costliest half-year Cat losses since 2011

Canada has tallied twelve catastrophes thus far

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Residents of several Calgary neighbourhoods affected by the 2024 hailstorm held a press conference on May 16, 2025 to express concerns over what they have been experiencing regarding insurance rate and deductible increases and difficulty finding coverage altogether.

Canadian homeowners are nowhere near the full-on insurance crisis experienced by some U.S. insureds. But Canadian homeowners in areas impacted by certain perils are beginning to experience market pressures that others in the country aren’t going through. Hail is a peril exerting such pressure.

In light of what’s happening with losses and the resultant impacts on premiums, deductibles and availability, the Institute for Catastrophic Loss Reduction recently published ‘Good/Better/Best’ resilience guidance for Canadian homeowners, outlining scientific, evidence-based resilience features for homes ranked in order of efficacy, not cost or ease of installation.

The scaled advice (Good/Better/Best for basement flooding, severe wind, hail and winter storm, and Better/Best for earthquake and wildfire due to the damaging and potentially lethal nature of those two perils) represents the culmination of years of work and are now available in English and French on ICLR’s website.

This article is excerpted from one that appeared in the June-July, 2025 print edition of Canadian Underwriter.