- Casualty/Liability: Insurers are able to focus on profitable growth as the primary market is stable. Meanwhile, well-performing, non-US exposed risks are experiencing single-digit rate increases. The excess market is challenged in high exposed classes, which affects renewals and new capacity requirements. Although US litigation trends and rising loss costs are key factors in pricing, facultative reinsurance rates, capacity and conditions are also important factors.
- Cyber: Canada’s cyber market conditions remain challenging, Aon has found. Controls and loss experience are the primary drivers of pricing and terms in the region. A lack of proper actuarial modelling from the outset of the cyber marketplace has led to historic under-pricing. However, it was noted that as more claims are paid by insurers, better claims data is developed, which is leading to more accurate models reflecting higher pricing.
- Property: Aon found that there are signs of stabilization emerging in Canada’s property market. Some rate pressure and capacity issues continue, however, particularly for complex and/or natural catastrophe-exposed risks. Well-performing risks are experiencing modest rate increases.
- Directors and Officers: Profitability issues, combined with ongoing concerns related to the impacts of COVID-19 on some sectors, continue to create a challenging market environment, Aon said. It was also noted that there is a heightened focus on the ability of companies to deliver on their Environmental, Social and Governance (ESG) commitments. Canadian market trends are lagging behind the US trends, with 2022 expected to be the third year of rate increases in Canada.
“The Canadian insurance market will continue to climb out of the hard market in 2022,” commented Aon Canada chief broking officer Russell Quilley. “With many of the insurance carriers looking to grow in 2022, this additional pressure will translate to more favourable terms for clients.”
