What’s worrying Canada’s brokers now?

The 1990s catchphrase, ‘It’s the economy, stupid,’ is gaining traction with property and casualty (P&C) insurance brokers, Canadian Underwriter’s 2025 National Broker Survey finds.  

Although talent recruitment and retention, at 59%, remains the strongest broker channel challenge for the second year in a row, 56% of Canadian P&C insurance brokers surveyed ranked economic issues as their Number 1 concern. That’s up slightly from 54% in 2024.

It’s a small percentage difference, but consider this: economic issues were the Number 2 concern in 2025. Talent issues, which peaked at 69% in the 2024 survey, dropped by 10% this year.

Persistent economic worries are likely fuelled by tariff talk from the United States that started in the weeks prior to Donald Trump’s Jan. 20 inauguration as president. On Mar. 4, 2025, Trump’s administration imposed a wide-ranging 25% general tariff on goods imported to the U.S. from Canada and Mexico. Two days later, he paused those tariffs, and then imposed a targeted tariff on Canadian steel and aluminum products. What happens next is anyone’s guess.

Uncertainty regarding U.S. trade policy has put stock and bond markets into turmoil. If there is a prolonged trade war, Canada’s P&C insurers warn tariffs would likely raise their claims costs, meaning increased premiums for insurance policies that Canadian brokerages place for business and consumer clients. Under worst-case scenarios, tariffs are predicted to spark recessions in both Canada and its primary trading partners.

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Economic uncertainty

And that’s just tariffs. Brokers and their clients continue to voice concerns about lingering inflation and its impact on interest rates, which remain stubbornly high despite rate cuts by the Bank of Canada starting in June of 2024.

Canadian Underwriter’s 2025 National Broker Survey was fielded between Jan. 22 and Feb. 20, with 165 responses. For most question sets, respondents were able to choose multiple answers, so totals will not always equal 100%. The survey is supported by Sovereign Insurance.

Rounding out brokers’ Top 5 challenges, 51% of survey respondents say natural catastrophes and climate change threaten the channel, up from 47% in 2024 and 38% in 2023. Like economic woes, concerns about NatCats and climate change appear motivated by client experiences – 2025 saw record flooding, fire and hail, with the industry paying out more than $8.9 billion in claims.

Another 50% of respondents say growth of direct sales models will continue making things harder for the broker channel going forward (down from 54% in 2024 and a high of 59% in 2022). And 46% of 2025 respondents say the hard market is the channel’s biggest challenge (down from 53% in 2024, 66% in 2023 and a high of 76% in 2022).

Further worries

Rounding out the remaining Top 10, concerns about misperception of broker value (43% in 2025) remain consistent with prior surveys, while worries about a consolidating insurance market diminished (42% this year, compared with 50% in 2024). Rapid technological change (38%), legislative and regulatory uncertainty (31%) and a tendency by customers to self-educate about insurance options (26%) also were seen as sources of future challenges.  

Other issues were raised in the verbatim answers. One respondent from a medium-sized firm with between 16 and 30 years in the business mentions a “client lack of understanding of coverage complexity – until there is a claim.”

Also, brokers in the survey expressed frustration over the downloading of claims tasks and other duties onto brokers. One broker at a smaller firm with fewer than 16 years in the business tells the survey, “Insurance companies [are] giving more and more responsibilities to brokers and not increasing commissions.”

Commenters also raise red flags about wage issues, minimum volume requirements set by some insurers, market and coverage restrictions, and price undercutting by some players.   

This article is excerpted from one that appeared in the April-May 2025 print edition of Canadian Underwriter.

Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.