Canada’s property/casualty (P/C) insurance segment remains resilient, supported by strong levels of capitalization, improved underwriting profitability and steady investment returns, according to a new AM Best report.

Additional factors including the increased adoption of technology and data analytics are among the factors underpinning AM Best’s decision to maintain its stable outlook on Canada’s P/C segment. The stable outlook also reflects the P/C segment’s sustained profitability in 2025, bolstered by improved underwriting performance from a moderation in catastrophe activity relative to the prior year.

The report, titled “Canada Property/Casualty: Strong Earnings and Improved Underwriting Results Underpin Stable Outlook,” also notes that the steady investment returns were driven by elevated fixed-income yields, despite interest rates largely stabilizing. However, challenges will persist moving forward, including from the increased frequency and severity of climate-related catastrophes. According to the report, the profitability in the personal auto business remains under pressure from rising vehicle repair costs and increased levels of auto theft, although it’s showing signs of moderating.

“Sustaining profitability going forward will depend on the industry’s ability to be agile and refine its risk management practices and leverage technological innovations, including artificial intelligence,” said Alan Murray, director, AM Best.

Regulatory bodies in Canada have continued to provide prudent oversight, driven by the Office of the Superintendent of Financial Institutions (OSFI), with current supervisory frameworks placing increased emphasis on operational resilience, cyber hygiene, and strong governance around the use of AI. At the same time, provincial regulators are rolling out major auto insurance updates.

Among the report’s other findings:

  • From a top-line perspective, the Canadian P/C industry’s insurance revenue base grew 5.6% to CAD 97.4 billion on a gross basis in 2025 and 6.0% to CAD 76.1 billion on a net basis. In contrast, insurance service expenses decreased by 6.3% to CAD 79.4 billion.

  • The Canada P/C insurance landscape remains highly concentrated, with a handful of large national insurers controlling a significant share of the market. In this environment, scale and consolidation continue to serve as vital competitive advantages.

  • The AM Best report also discusses the impact of geopolitical risk, wildfire risk and the growing and increasingly critical role that managing general agents and brokers are playing in Canada as insurer seek out flexible ways to deploy capital and expand market reach.

To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=368922.

This Best’s Market Segment Report is one of several reports focused on Canada’s major insurance segments ahead of AM Best’s Insurance Market Briefing – Toronto, which will take place Wednesday, Sept. 23, 2026. For more information about the complimentary AM Best’s Insurance Market Briefing – Toronto, please visit the event website.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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