Conservative insurance market continues in Canada, Aon reports
Risks remain for economic and social inflation, geopolitical tensions, catastrophic weather and supply chain and labor issues
TORONTO, Sept. 12, 2023 /PRNewswire/ -- Aon plc (NYSE: AON), a leading global professional services firm, has released its 2023 Fall Canadian Insurance Market Update in support of Aon's ongoing commitment to help Canadian clients make better decisions about risk management and insurance programs. The report finds that a conservative market environment remains as uncertainty around economic and social inflation, geopolitical tensions, rising catastrophic weather losses, and supply chain and labour challenges continue. However, there is optimism within the market with moderate competition returning as insurers look for growth opportunities with a particular emphasis on well-performing risks.
"The challenges in the property market continue to be a focal point throughout 2023, primarily driven by natural catastrophe concerns, and reinsurance costs," said Russell Quilley, head of Commercial Risk Solutions and chief broking officer for Canada at Aon. "Climate concerns will be heavily weighted in underwriting risk exposures, increasing the need for sophisticated modeling and risk quantification tools to better understand and manage risk."
Other key findings include:
By the end of Q2 of 2023, Canada had experienced approximately $760 million of insured catastrophe losses.
The property market continues to be a dynamic space with persisting rate increases, valuation scrutiny and capacity contractions. Underwriting continues to be highly individualized, with risks in susceptible geographies (e.g. NatCat exposed) and perceived high-risk exposures experiencing the most acute and significant market challenges.
There is a continued focus on valuations and clients should expect this to be a focal point during their renewal process.
Insurers are managing their portfolio performance through careful risk selection and deploying capacity strategically which highlights the importance of quality and robust risk information for policy holders.
What was once considered ancillary documentation, environmental, social and governance strategy and performance is now a baseline for a fulsome submission.
The casualty market is observing a return of capacity and larger limits, particularly in the excess market.
The cyber insurance market continues to be more competitive due to the improvement to insurer loss ratios and an increase in global capacity.
For more information, access the 2023 Fall Canadian Insurance Market here.
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