Canadian insurance market turns competitive in 2024 – report

Canadian insurance market turns competitive in 2024 – report | Insurance Business Canada

Insurance News

Canadian insurance market turns competitive in 2024 – report

Insurers seek growth by targeting well-performing risks

Insurance News

By
Mav Rodriguez

The Spring 2024 Canadian Insurance Market Update from Aon plc reveals that intense competition among insurers is creating a more favourable market for buyers. As insurers seek growth opportunities, they are particularly targeting well-performing risks, suggesting an evolving appetite for expansion in the industry.

The report noted that the market shift has been marked by increased capacity and a stronger appetite for growth, but insurers continue to prioritize profitability through careful risk selection.

“Overall, there is an expansion in capacity and appetite signaling that the market is transitioning into a more competitive space. However, the focus on risk selection continues to prevail as insurers strive to maintain profitability,” Aon chief broking officer Russell Quilley said.

“Underwriting remains disciplined and risk differentiation continues to be a top priority as underwriters increasingly rely on data, insights, and analytical tools such as modelling to support decision making.”

Aon’s report highlights several significant trends in the Canadian insurance market, the most notable of which is that organizations are increasingly seeking alternative risk solutions, such as parametric solutions, structured insurance facilities, and captives, to better manage volatility in their insurance programs.

Many insurers have also returned to profitability in 2023. This competition is further driven by insurers’ strategic focus on careful risk selection and capacity deployment, emphasizing the importance of robust risk information for policyholders.

The London insurance market is actively diversifying its global portfolio, with Canada being seen as an attractive investment due to its relatively low catastrophic exposure. Meanwhile, domestic insurers are targeting the manufacturing sector as a key area for growth, indicating a shift in market focus to achieve both growth and retention objectives.

Global economic losses in 2023 were estimated at $380 billion, while global insured losses amounted to $118 billion, highlighting a substantial global protection gap of 69%.