Worried about wildfires sending claims soaring this year, Canada’s property and casualty insurers are pushing owners to flood- and fire-proof homes and urging the government to take climate issues more seriously despite economic turmoil.
Insurers Intact Financial, TD Insurance, Wawanesa and Definity Financial face financial pressure as claims surge and in turn push up home-insurance premiums, which rose about 6% last year in Canada.
They worry Prime Minister Mark Carney’s prioritization of energy and the economy over risks from climate change could contribute to more wildfire- and flood-related damage over time.
Canada, which has nearly 10% of the world’s forest, has seen record wildfire and flood damage in recent years. But calamity-prone regions are still insurable in Canada, unlike in some other countries where companies will not insure houses for wildfires.
This year is expected to be among the hottest years on record, according to Environment and Climate Change Canada, increasing the likelihood of wildfires. Research has linked human‑driven climate change, fueled by rising carbon emissions, to hotter and more frequent heatwaves, which dry out ecosystems and create conditions that fuel wildfires and intensify floods.
Carney in 2015 as the Bank of England governor delivered a historic speech about climate change and its impact on financial stability. But he is now counting on the oil sector to help the Canadian economy weather a hit from U.S. President Donald Trump’s tariffs and has pledged to support global efforts to stabilize energy prices due to the Iran war, putting some initiatives to combat climate change on the back burner.
“It feels to me like this (climate) has been somewhat deprioritized. And that’s why we’re going to, as an industry, keep it at the top of the table,” Rowan Saunders, the CEO of the country’s fourth-largest property and casualty insurer Definity, said in an interview.
Steady Profits
To be sure, Canada’s insurers continue to enjoy strong profits despite the pressure from climate-related disasters.
The industry’s major players reported higher profits last year and spent less on paying out claims in 2025 than in 2024, when those hit a record. Net income rose 56.7% for the Canadian property and casualty insurance industry last year, according to data from the industry regulator, which requires they hold strong capital levels.
Still, insurers have invested millions to encourage policyholders to rebuild flood‑ and wildfire‑resilient homes, folding those upgrades into claim settlements. They have partnered with municipal governments and invested in wildfire risk modeling.
They are also rewarding consumers for weatherproofing their homes, with discounts for completing risk assessments or installing fire-resistant roofing and siding.
The insurance industry’s proposals to Ottawa, presented to parliament last year, include updating building codes to make new homes resilient to climate change, investing in natural infrastructure and preventing new construction in areas already prone to floods and wildfires.
Canada in 2024 recorded one of its worst fires as flames engulfed nearly a third of the structures in the tourist town of Jasper and forced thousands to evacuate. At the same time, a hailstorm in Calgary and floods in Toronto elevated insurance claims to a record of C$9.4 billion that year.
In the past three years, a total of about 32 million hectares of land has been scorched by wildfires.
Build With a Plan
Insurers worry in particular that Carney’s plan to address a chronic housing shortage does not adequately consider severe weather risks.
Ottawa has proposed building 3.9 million homes, of which about 500,000 could be in high-risk flood areas, and over 200,000 in high-risk wildfire areas, said Liam McGuinty, vice-president of federal affairs at the Insurance Bureau of Canada.
“We’ve got to stop this problem from getting worse,” McGuinty said.
Reuters spoke to insurance companies, reinsurers, climate groups and insurance lobby groups that said climate has taken a backseat as the Carney government prioritizes trade and the global energy crisis.
Canada’s environment ministry said climate remains a critical issue for the government and fighting climate change continues. Since 2015, the government has invested more than C$6.6 billion to help communities be better prepared and manage wildland fire, among other projects, it said.
In his first budget, Carney eliminated a cap on oil and gas emissions in favor of other climate measures like strengthened industrial carbon pricing and the deployment of carbon capture and storage technology. But now, the carbon price piece of his plan is in jeopardy, Reuters has reported.
“We’re at a point now in Canada where we can have what used to be a year’s worth of severe weather losses happening in a single day. And we don’t have the level of public investment commensurate to that reality right now,” said David Leibl, vice president of sustainability and corporate affairs at Winnipeg-based insurer Wawanesa. “We need to close that gap.”
(Reporting by Nivedita Balu in Toronto; editing by Caroline Stauffer and Deepa Babington)
Photograph: Flames from the Donnie Creek wildfire burn along a ridge top north of Fort St. John, British Columbia, on Sunday, July 2, 2023. (AP Photo/Noah Berger)
