Canada Home Insurance Market Size

Canada Home Insurance Market Analysis

The purchase of a home or personal property insurance is not mandated by law. However, it provides coverage for an individual's single largest investment - a home. In fact, most banks and mortgage holders require proof of insurance on the property as security for the loan or mortgage. As the second-largest line of P&C insurance business after auto insurance, home or personal property insurance includes home, condominium, cottage, mobile home and tenant's insurance. It covers the property, personal belongings and personal liability of the policyholder and the policyholder's spouse or partner, children (with age limits) and dependants (with age and other limits). As with all insurance premiums, insurers consider several risk factors to determine the price they charge an individual for home insurance. For example, insurers look at the neighbourhood and the frequency and types of past claims in that area; the cost to replace a home's contents and restore a home to its previous condition; the condition and age of the roof; the type of heating, electrical and plumbing systems; and details about any additional structures on the property. Insurers analyse these risks to estimate how likely it is that a policyholder, or a group of people with a similar set of circumstances, will make a claim and how much that claim will cost.

COVID-19 may have affected the earnings of individual P&C insurers unevenly, but the industry's overall capital base reached the unparalleled height of Canadian Dollars 52.6 billion during the first three quarters of 2020, according to the Property and Casualty Insurance Compensation Corporation (PACICC). This is the most capital that insurers have ever held in Canada. Strong, resilient capital is the foundation of the insurance industry and this firm base should allow insurers to play a strong role in assisting Canada's rebound from the COVID-19 pandemic in 2021.

In 2020, Canadian insurers wrote Canadian Dollar 71.0 billion in direct written premiums for insurance on consumers' homes, cars and businesses. Over the last few years, Canadians from coast to coast have been experiencing significant financial losses from many small severe weather events. While 2016 was notable in having the largest insured loss event with the Fort McMurray wildfire, every year since has ranked within the top 10 highest loss years on record. This underscores the need for Canadians to adapt and prepare for severe weather events.