Canadian Insurers Look Toward Growth in 2027
Morningstar DBRS analysts report that insurers are maintaining strong balance sheets despite recent catastrophe losses.
Updated on Oct. 21, 2026 in Insurance
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As of October 14, 2026, Morningstar DBRS analysts report that Canadian insurers are well-positioned for continued profitability heading into 2027. Despite a difficult environment for domestic growth, the industry is pivoting toward international expansion and service-based revenue.
Why it matters
Large Canadian life insurers are increasingly focusing on markets in the United States and Asia as domestic growth opportunities remain limited. To maintain efficiency and competitive standing, companies are also heavily investing in artificial intelligence for their core operations.
Canadian property and casualty insurers have delivered double-digit returns on equity over the past five quarters. While 2024 saw insured catastrophe losses exceed $9 billion, losses in 2025 and early 2026 reached more stable, normalized levels.
The players
Morningstar DBRS
This global credit rating agency provides independent analysis and research on the financial strength of corporations and government entities.
CatIQ
This organization specializes in the collection and analysis of detailed catastrophe and weather-related loss data for the insurance industry.
The details
Morningstar DBRS estimates that the storms which hit Ontario on September 2, 2026, caused approximately $1 billion in insured losses, surpassing the initial $563 million estimate issued by CatIQ. In response to rising catastrophe risks, insurers are increasingly prioritizing fee-based wealth management products and favoring share buybacks and dividend growth over capital deployment.
Timeline
2024 saw insured catastrophe losses exceed $9 billion.
Catastrophe losses reached normalized levels between 2025 and the first half of 2026.
Storms caused widespread flooding and hail in Ontario on September 2, 2026.
Morningstar DBRS held its Credit Outlook conference in Toronto on October 14, 2026.
Double-digit returns on equity for the insurance sector are expected to persist throughout 2027.
Market Dynamics
The September 2, 2026, Ontario storm event serves as a recent example of the rising catastrophe losses that necessitate ongoing financial risk assessments by Canadian insurers. These climate-related challenges underscore why the industry is shifting its long-term strategy toward diversified international markets and service-oriented wealth management.
Investors may see continued share buybacks and dividend increases as major life insurers focus on capital efficiency rather than expansion. Those holding insurance stocks should monitor how companies balance these payouts against the rising costs of catastrophe-related claims.
The takeaway
The insurance sector is successfully navigating higher catastrophe losses by modernizing through artificial intelligence and diversifying into global markets. Policyholders and investors can expect insurers to remain highly selective in their product offerings to maintain current profitability levels.
Further reading
For more information on the evolving financial landscape, see the Canada Insurance section.
Source note: This article includes information reported by Insurance Business.
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