As we continue to navigate economic, geopolitical and insurance market uncertainty, we expect similar or even more challenges in 2025. I believe three areas are of particular importance to Canada’s P&C insurance industry:
Succession planning — the insurance industry is experiencing a significant generational shift. By 2029, millennials will become the largest working-age generation in Canada. This shift is compounded by the fact that baby boomers will be 65 and older by 2031. This demographic change creates an urgent need for succession planning at all levels, including leadership, specialized expertise and the general workforce. Knowledge transfer will be key as we face challenges in acquiring and retaining talent sourced from a generation that sees the workplace differently.
Additionally, a staggering 76% of Canadian business owners plan to exit their companies within the next decade, representing a transfer of over $2 trillion in assets. However, only 10% of business owners have a formal succession plan in place. This situation poses a threat to the Canadian economy, as mergers and acquisitions will likely increase, and private equity will become more prominent.
The key to navigating this shift is to be ahead of the curve, with solid succession planning, strong company culture, and a business model that attracts and retains key talent. Engagement of younger generations comes with different challenges and requires shifts in mentality.
Client expectations — well-versed clients have high expectations of their insurance and risk management professionals. They want a strategic, trusted partner to provide them with insurance risk transfer programs, by leveraging cutting-edge data analysis tools and comprehensive products. This allows clients to focus on growth. Also, Canadian business owners want insurance professionals to have a deep understanding of emerging trends so they can help clients navigate the regulatory landscape of their respective industries.
Transformation through technology — the increased use of data-driven platforms allows P&C insurance professionals to analyze vast amounts of data, offering us deeper insights and enabling us to better cater to our clients’ needs. In addition, artificial intelligence (AI) will improve efficiency by streamlining processes and reducing errors, allowing redeployment of resources to focus on growth initiatives that benefit clients.
Digital platforms providing ease of distribution and speed are also on the rise. AI will complement such platforms to further transform the insurance industry landscape.
