The pricing shock
Climate disasters cost Canadian insurers $3.1 billion in 2024, the fourth-highest year on record. Premiums are rising 12–20% in high-risk zones, with some reinsurers exiting entire regions.
| Risk Category | Avg. Premium Increase (2024) | Claims Cost ($ bn) | Source |
|---|---|---|---|
| Flood | +18 % | 1.2 | IBC 2025 |
| Wildfire | +14 % | 0.9 | IBC |
| Wind & storm | +10 % | 1.0 | IBC |
Structural shifts
- Risk models are being recalibrated with satellite and AI data.
- Insurers face higher reinsurance costs and capital adequacy requirements.
- Governments are considering public-private catastrophe pools.
What leaders can do
- Quantify climate risk by asset location. Feed exposure data into renewal pricing.
- Invest in resilience. Upgrades can reduce premiums 10–15 %.
- Engage with underwriters early. Transparency attracts better terms.
- Support industry-wide resilience financing. Shared data lowers systemic cost.
Arcus Insight: Insurance is the economy’s climate barometer. Pricing risk accurately will define which regions — and firms — remain insurable.