Property and casualty insurance in Canada provides financial protection against loss or damage to physical assets like homes, cars, and businesses, as well as liability for injuries or damage caused to others. This type of insurance is distinct from life insurance, focusing instead on risks to property and possessions. The Canadian property and casualty insurance industry is a significant market, writing $71.9 billion in premium in 2020. Understanding this insurance is crucial for Canadian homeowners, drivers, and business owners to manage their financial risks effectively.
What Property and Casualty Insurance Covers
Property and casualty insurance, often abbreviated as P&C insurance, is designed to cover risks that result in loss to property and possessions. This stands in contrast to life insurance, which covers risks associated with human mortality and morbidity. Common personal lines of P&C insurance include coverage for homes, automobiles, and boats. For businesses, this insurance protects physical assets such as buildings, stock, and equipment from damage or destruction. It also provides crucial liability protection against lawsuits for injuries or property damage caused by a business's operations, products, or completed work.
The scope of commercial property and casualty insurance is extensive. A standard commercial property policy covers a business's physical assets located on its premises, including buildings, inventory, tools, and equipment. It can also cover items like exterior building glass, signs, and underground utilities. Commercial general liability insurance is a foundational coverage designed to protect a business from financial losses due to legal claims. This includes accidents involving visitors on the business premises or damage caused by the business's products or services at a customer's location.
Beyond these core coverages, businesses can access a wide range of specialized P&C solutions. These can include inland marine insurance for equipment in transit, equipment breakdown coverage for vital systems like production machinery and refrigeration, and crime insurance to protect against theft, fraud, or forgery. Many insurers offer the flexibility to customize policies, bundling various coverages into a single, streamlined policy for easier management. This allows businesses to tailor their protection to the specific risks associated with their industry and operations.
The Canadian P&C Insurance Industry Landscape
The property and casualty insurance industry in Canada is a substantial and competitive market. In 2020, the total industry wrote $71.9 billion in premium. The market is characterized by a mix of large insurance groups and many smaller carriers. The top ten property and casualty insurance companies collectively held about two-thirds of the total market share in 2020, writing approximately $45.6 billion in premium. The remaining 36.5% of the market, representing $26.3 billion in written premium, was comprised of all other insurance carriers.
The industry is regulated to ensure stability and consumer protection. Most insurance companies providing coverage for homes, cars, and businesses in Canada are regulated by federal or provincial authorities. For example, in Ontario, the Financial Services Regulatory Authority of Ontario (FSRA) is the regulatory body for the property and casualty and general insurance sector. Furthermore, the Property and Casualty Insurance Compensation Corporation (PACICC) exists to protect eligible policyholders from undue financial loss if a member insurer becomes insolvent, helping to minimize costs and maintain confidence in the system.
The average property and casualty insurer in Canada has assets of only $246 million. Actuaries play prominent roles in the underwriting and ratemaking functions and in building financial strength and stability in the reserving and financial reporting functions. They help guide insurance companies when helping policyholders recover from disaster and misfortune. Actuaries protect homes, cars, boats, and businesses within the property and casualty insurance industry.
Major Property and Casualty Insurers in Canada
The Canadian property and casualty insurance market is led by several large insurance groups. According to rankings based on direct premiums written and market share, Intact Group was the largest company in 2023 with C$11.15 billion in insurance revenue. In 2020, Intact Group represented 14.3% of the market, writing $10.3 billion in direct premiums. This positioned it well ahead of its nearest competitor at the time. The ranking of the top insurers shows a concentrated market where a few key players hold significant portions of the total business.
Following Intact Group, other major insurers include Desjardins Group and Aviva Group. In 2020, Desjardins Group held 8.0% of the market with $5.7 billion in direct premiums written, while Aviva Group held 7.8% with $5.6 billion. Other notable companies in the top ten include Lloyd's Underwriters CAB, Wawanesa Mutual Insurance Company, and RSA Group. The list of leading insurers provides a view of the competitive landscape, though market shares can shift slightly from year to year as companies grow their premium volumes.
The stability of the top ranks can vary. For instance, in 2020, Desjardins Group moved into second place, displacing Aviva Group. Meanwhile, Lloyd's Underwriters CAB and Co-operators Group swapped positions between fourth and sixth place compared to the prior year. Despite these movements, the top three insurers collectively controlled about 30% of the industry market share in 2020. The presence of these large, established groups offers consumers and businesses a range of options for their property and casualty insurance needs.
Key Components of Commercial P&C Insurance
Commercial property and casualty insurance policies are built from several core coverage components that address common business risks. Property insurance is fundamental, covering a business's physical assets against damage or destruction from events like fire or theft. This includes the building itself, business personal property like stock and equipment, and can extend to items such as signs and underground utilities. Equipment breakdown coverage is another critical element, protecting important systems like computers, production machinery, and refrigeration equipment from mechanical or electrical failure.
Liability protection forms the other major pillar of commercial P&C insurance. Commercial general liability insurance is designed to protect a business from lawsuits for bodily injury or property damage to third parties. This coverage applies to incidents that occur on the business premises or as a result of the business's operations or products. For businesses facing higher potential liabilities, umbrella or excess liability policies are available. These provide an extra layer of coverage that goes above the limits of primary liability policies, offering higher limits in the event of a catastrophic loss.
Many insurers offer additional coverages and services that can be added to a commercial package. Crime insurance provides a broad range of protections against employee dishonesty, theft, forgery, and computer fraud. Some insurance providers also include value-added services, such as a legal helpline that offers policyholders free general legal information by telephone. Furthermore, policies can be customized with industry-specific enhancements designed to address the unique exposures related to a particular sector, such as construction, technology, or manufacturing.
- Property Insurance: Covers buildings, stock, equipment, and business personal property.
- Commercial General Liability (CGL): Protects against lawsuits for injury or property damage.
- Equipment Breakdown: Covers failure of vital systems like machinery and computers.
- Crime Insurance: Protects against theft, fraud, forgery, and computer fraud.
- Inland Marine: Covers equipment, tools, or property while in transit or temporarily off-premises.
- Umbrella/Excess Liability: Provides higher liability limits above primary policies.
Considerations for Business Insurance
When obtaining property and casualty insurance for a business, several important factors must be evaluated. Each business has different risk exposures based on its industry, size, operations, and locations. A small retail store will have different insurance needs than a large manufacturing company or a technology firm. It is essential to consider all physical assets that need protection, including multiple locations, owned or leased equipment, and inventory. Liability exposures must also be thoroughly assessed, considering interactions with customers, clients, and the general public.
Business owners should review the flexibility and adaptability of an insurance policy. As a business grows or changes, its insurance coverage should be able to adapt accordingly. Some insurers offer streamlined package policies that bundle core coverages into one tailored solution, which can simplify management. The ability to customize a policy with specific endorsements or enhancements for a particular industry is a valuable feature. Furthermore, businesses with operations or exposures in the United States may require insurers with expertise in managing cross-border risks and placing US coverage.
The claims process and support services offered by an insurer are practical considerations. Efficient and hassle-free claims service is crucial for helping a business recover and resume operations after a loss. Some insurers provide risk management services, where experts work with the business to identify and mitigate potential hazards. Policyholders should also understand the details of their coverage, including policy limits, deductibles, exclusions, and conditions. Having a single, consolidated policy for easy reference to all coverages, limits, and deductibles can be beneficial for business owners.
Market Concentration and Premium Data
The Canadian property and casualty insurance market demonstrates a significant level of concentration among its largest players. The direct premiums written and market share data from 2020 illustrate the distribution of business across the top insurers. This concentration means that a relatively small number of companies are responsible for a large portion of the industry's total premium volume. The figures also show the scale of operations for leading insurers like Intact, which wrote billions more in premiums than its closest competitors during that period.
The top three property and casualty insurers in Canada controlled about 30% of the industry in 2020. The top 10 property and casualty insurance companies claimed two thirds of the total market and wrote around $45.6 billion in premium in 2020. All other carriers represented 36.5% of total market share. The Canadian property and casualty insurance industry wrote $71.9 billion in premium in 2020.
| Insurer | Direct Premiums Written | Market Share |
|---|---|---|
| Intact Group | $10.3 billion | 14.3% |
| Desjardins Group | $5.7 billion | 8.0% |
| Aviva Group | $5.6 billion | 7.8% |
| Lloyd's Underwriters CAB | $4 billion | 5.6% |
| Wawanesa Mutual Insurance Company | $4 billion | 5.5% |
| Co-operators Group | $3.9 billion | 5.4% |
| RSA Group | $3.9 billion | 5.4% |
| All Other Carriers | $26.3 billion | 36.5% |
The top three insurers saw a marginal decrease in market share in 2020, controlling about 30% of the industry compared to almost 32% the year prior. Intact Group was the largest property and casualty insurance company in Canada, representing 14.3% of the market. Desjardins Group was the second largest with 8.0% of the market. The ranking registered very few movements from the previous year.
Frequently asked questions
Who are the biggest property and casualty insurance companies in Canada?
The largest property and casualty insurance company in Canada is Intact Group. In 2023, Intact Insurance Co. reported C$11.15 billion in insurance revenue. Other major insurers include Desjardins Group and Aviva Group. In 2020, these top three insurers collectively controlled about 30% of the market share. The top ten insurers together held approximately two-thirds of the total Canadian P&C insurance market.
What does commercial property and casualty insurance typically cover?
Commercial property and casualty insurance typically includes several key coverages. Property insurance protects a business's physical assets like buildings, stock, and equipment. Commercial general liability insurance protects against lawsuits for bodily injury or property damage caused by the business's operations or products. Additional common coverages include equipment breakdown, inland marine for property in transit, and crime insurance. Many policies can be customized with industry-specific enhancements.
What is the difference between property and casualty insurance and life insurance?
Property and casualty insurance is focused on risks that result in loss to property and possessions, while life insurance covers risks associated with human mortality and morbidity. In Canada, there are many companies that offer property and casualty insurance in addition to life insurance companies. Property and casualty insurance protects items like homes, cars, boats, and businesses, helping policyholders recover from disaster and misfortune. Actuaries play a prominent role in this sector by guiding insurance companies in underwriting and financial reporting. This type of insurance is one of the most common types in the Canadian market, with the industry writing billions in premiums annually to cover these physical and liability risks.
How is the property and casualty insurance industry regulated in Canada?
Most insurance companies providing coverage for homes, cars, and businesses in Canada are regulated. The Financial Services Regulatory Authority of Ontario is the specific regulatory body for Ontario's property and casualty, and general insurance sector. Furthermore, the Property and Casualty Insurance Compensation Corporation protects eligible policyholders from undue financial loss if a member insurer becomes insolvent, working to minimize costs. This regulatory framework oversees a diverse industry where the average property and casualty insurer in Canada has assets of only 246 million dollars. The system ensures stability and consumer protection across the sector, which includes major groups like Intact and Desjardins.
What was the total size of the Canadian P&C insurance market?
In 2020, the total Canadian property and casualty insurance industry wrote 71.9 billion dollars in premium. The top ten insurers contributed about 45.6 billion dollars to that total, claiming two thirds of the market. The remaining 26.3 billion dollars in written premium came from all other insurance carriers, representing 36.5 percent of the total market share. This industry, which protects homes, cars, and businesses, saw its top ten companies collectively control around 30 percent of the market that year. The market leader, Intact Group, alone wrote 10.3 billion dollars in direct premiums, illustrating the scale of this major financial sector in Canada.
What is umbrella liability insurance in a commercial context?
In a commercial context, umbrella liability insurance is an extra layer of liability coverage designed to go above and beyond other liability policies. It provides higher liability limits in the event of a catastrophic loss. This coverage is available over an insurer's own liability products or as a separate monoline product over another carrier's primary or umbrella coverages. For example, Aviva offers it as part of their Enterprise policy or as a standalone product. It is designed to protect businesses from significant financial exposure that exceeds the limits of their standard commercial general liability policy, offering an added safeguard against severe lawsuits or claims.
Sources and further reading
- These are the top 10 property/casualty insurance ... insurancebusinessmag.com
- Property and casualty insurance cia-ica.ca
- Property and Casualty Insurance aviva.ca
- Liberty Mutual Canada | Property and Casualty Insurance ... libertymutualcanada.com
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.