2025 Executive Outlook | | A tale of two markets

2025 is shaping up to be the best of times. And the worst of times.

It’s projected to be a tale of two markets.

On one hand, Canadian property and casualty insurance professionals predict the best of times for commercial insurance lines next year.

Capacity is returning to the Canadian market. Premiums for Canadian businesses are still ascending, but rates are softening. Insurers are seeking to grow not only in the larger directors’ and officers’ and cyber insurance spaces, but in some underserved commercial lines — hospitality, real estate and retail, to name a few.

On the other hand, expect the worst of times for personal lines home and auto insurers. 2024 was a time of great darkness throughout the land, including another record-setting year of natural catastrophe losses for Canada’s property and casualty insurers.

In our upcoming 2025 Executive Outlook series, beginning today, P&C industry executives frequently cite $7.7 billion as the magic number for NatCat damage claims in 2024. That was the official number available to the industry when our questionnaire was fielded. But it’s since changed, up to $8.3 billion and counting as of our press time in late November.

Industry sources tell CU the NatCat losses have been felt in personal lines more than in commercial lines.

Certainly, the inflated prices of building materials have not made home rebuilds any cheaper. In auto, many different factors are conspiring to harden rates in personal auto lines, as insurers report a tight squeeze in profitability. The price of repairs, labour costs, and auto theft are all on insurers’ radar heading into next year.

What does 2025 have in store?

Canadian Underwriter reached out to more than 30 P&C insurance industry executives to ask where they think P&C insurance markets are headed. Join us daily between Monday, Dec. 23, and Friday, Jan. 2, to hear how they responded to the following question:

• How would you characterize the Canadian commercial and/or personal lines markets heading into 2025?
  • Is there any reason to believe these trends are shifting/will shift over the course of the next 12 months? If so, how? If not, why?

Many gave us their thoughts. We will be publishing four responses daily, presented in alphabetical order by last name. We hope this series gives you insights into what to expect from 2025’s tale of two markets.

 

Feature image courtesy of iStock.com/Cesar Okada