Hard market conditions in personal lines home and auto continued during the final quarter of last year, which ranked as Canada’s worst catastrophe loss year ever.
Average personal auto insurance premiums across the country increased 11.3% in 2024 Q4 compared to the same period last year, while home insurance rates increased an average of 7.3%.
All provinces in Canada saw hiked home and auto insurance rates.
The increases follow a year in which natural catastrophe losses totalled $8.5 billion, a record in Canada. Insurance Bureau of Canada reports 275,000 insurance claims were filed last year, with 223,000 of those coming in just one month following floods in Ontario and Quebec, hail in Calgary, and a wildfire in Jasper, Alta.
“Coming out of the most destructive season in Canadian history for insured losses, the 2024 Q4 results show that the premium rate index continues to climb for both personal auto and personal property, demonstrating sustained market conditions,” says Steve Whitelaw, senior vice president and general manager at Applied Systems in Canada.
The Applied Rating Index reports on of current conditions and trends for personal home and auto insurance premium rates, based on an analysis of quotes completed.
In the personal auto line, all provinces experienced an increase year over year, with Alberta seeing the highest at 12.7% and the Atlantic provinces the lowest at 9%.
Elsewhere in Canada, Ontario’s auto insurance rates increased an average of 11.1%, while Quebec saw auto rates rise by 9.3%
In other news: Why high premiums alone won’t fix Canada’s growing NatCat risk
In home insurance, all provinces in 2024 Q4 saw rate increases over the same period last year. Ontario’s increase was highest at 9%, while the Atlantic provinces saw the lowest at 4.4%.
In other provinces, home insurance rates climbed in Quebec (8.6%), Alberta (7.1%), Saskatchewan and Manitoba (7.9%), and British Columbia (4.7%),
Canada has been in the grip of a hard market cycle in personal lines home and auto since at least 2022, during the end of the pandemic.
This has been attributable to several factors, industry sources have told CU.
In 2022, the pandemic subsided, and people started driving more, including into the office, thus elevating claims losses, as IBC observed at the time.
High inflation also prevailed until late last quarter, as the central bank raised borrowing costs to cool an overheated economy and reduce inflation.
In auto lines, record auto theft levels, higher vehicle and car repair costs, and labour shortages in the car repair industry contributed to increased claims costs.
And of course, there were increased catastrophe claims. In 2023, Canadian insurers were already concerned about hitting $3.1 billion in Cat damage losses – and that was before 2024 almost tripled that total.
Feature image courtesy of iStock.com/CatLane