Canadian P&C Insurance Outlook 2024: Market Conditions Supportive of Premium Rate Increases

DBRS Morningstar released a commentary discussing our outlook for Canada’s property and casualty (P&C) insurers in 2024.

Key highlights include the following:

-- DBRS Morningstar's outlook for P&C insurance is Stable in 2024, following the Positive outlook and several credit rating upgrades in 2023.

-- Most of the key 2024 trends and developments point to premium rate increases, including higher reinsurance prices, inflation volatility, hard market dynamics, and intensifying severe weather events.

-- Improving investment returns will reduce the magnitude of premium rate increases but will not be sufficient to offset them.

-- Addressing the growing insurance availability and affordability concerns will be challenging without a meaningful reduction in insured exposures.

“In the short term, insurers will increase premiums to protect their underwriting profitability, satisfy solvency capital requirements, and maintain credit ratings.” said Nadja Dreff, Senior Vice President, Head of Canadian Insurance. “While growing climate-related exposures, robust population growth, and macroeconomic conditions are supportive of premium rate increases, they may prove to be more and more difficult to execute over time.”