Overview
The frequency and severity of climate-related disasters are climbing across Canada, pushing climate resilience to the top of the national agenda. Yet the path forward remains blocked by regulatory misalignment, legacy systems, and siloed sector efforts. Beinsure analyzed the IBC’s report and highlighted the key points.
Climate risk management and reporting are already starting to shape insurers’ organizational structure.
Many have created sustainability functions to lead the process. Groups are also starting to involve their subsidiaries, as more detailed climate data is required for granular analysis.
Canada’s Climate Risk Strategy
Canada’s climate risk strategy spans planning, legislation, financial regulation, federal operations and international engagement. It balances reducing emissions and preparing city streets, critical infrastructure, public services and finance for a rapidly changing climate.
Canada introduced its National Adaptation Strategy in November 2022 to guide a resilient national response to environmental threats.
The strategy embeds concrete goals focused on disaster response, health, ecosystems, infrastructure, the economy and workforce resilience—each supported by near-, mid- and long-term targets.
Governments, communities, Indigenous partners and the private sector informed its design.
To turn that vision into action, the federal government issued an Adaptation Action Plan aligning with the strategy. It identifies funding priorities, builds data and training infrastructure, and supports regionally prioritized measures that strengthen resilience before climate shocks hit.
Disconnected Regulation and Institutional Silos
While organizations like the Insurance Bureau of Canada (IBC) and the Institute for Catastrophic Loss Reduction (ICLR) exist to expand access to mitigation tools, their efforts often miss alignment with government policy.
We’ve got Canadian government agencies trying to intervene and support resiliency efforts. But there’s little connection between what non-profits, regulators, and private sector players are trying to achieve.
Puneet Chattree, insurance industry lead at Accenture Canada
That disconnect deepens when construction codes and real estate regulations enter the picture. Insurance, government, and building oversight bodies continue to operate in silos.
This fractured approach slows the rollout of scalable, long-term resilience strategies.
From Reaction Mode to Strategic Focus
The insurance sector in Canada has spent much of the past decade reacting to climate threats instead of preparing for them. According to Chattree, that lag has come at a steep cost.
Over the last five years, the industry’s been playing catch-up. The pace of insurable losses from catastrophic events has only accelerated, peaking in 2024 at a record high.
Rising losses have forced the issue into boardrooms. What was once a reactive concern is now driving strategic decisions at the executive level. Chattree said top carriers are asking themselves one thing: will we still be able to protect policyholders a decade from now?
New shift has already changed how insurers operate
Prevention is no longer an optional benefit.
Carriers now collect risk data, build prevention-focused partnerships, and embed these tactics directly into underwriting and claims workflows.
Prevention has become foundational. It’s no longer a value-add—it’s a requirement.
On the financial side, OSFI (Office of the Superintendent of Financial Institutions) released Guideline B‑15 to ensure banks and other federally regulated financial entities embed climate risks into governance, operations and capital planning.
The guideline expects institutions to conduct scenario analyses, improve climate-related disclosure, and adjust business models under both physical and transition risk pressures.
At the international level, Canada has committed to doubling its climate finance support to the developing world—from $2.65 bn for 2015–2021 to $5.3 bn for 2021–2026—aiming to aid global transition toward low‑carbon, resilient development
For federal operations, the Greening Government Strategy charts a path to net‑zero and climate‑proofed government by 2035.
It sets emission and resilience targets across procurement, fleets, buildings, biodiversity and more—requiring Crown entities to report on their climate risks and risk management in their planning.
Insurers Cannot Ignore the Impact of Climate Change
Insurers around the world cannot ignore the impact of climate change on their business, reporting, and strategy. Moody’s Analytics conducted interviews and a survey of 30 re/insurers from Europe, Canada and North America.
We have observed in our interviews that some insurers in jurisdictions such as the USA are more inclined to wait for the requirements to be finalised. They also seem to opt to follow the minimum compliance path.
Barbara Zonneveld, the Director-Product Management Moody’s
The extent to which current capabilities will have to be modified is likely to have led to the fact that 62% of the companies would like to have a single system, able to support both quantitative and qualitative disclosures.
Beyond reporting compliance, insurers have begun to understand the impact climate could have on risk management, strategy, and their overall business. Many have already been working on developing, implementing, and improving their climate and ESG-related data, models, systems, and processes.
With the speed of recent global regulations and increasing investor pressure, they may soon find themselves in the scope of mandatory frameworks, such as from the ISSB, who are working on creating a global reporting baseline.
Lack of adequate climate disclosures can also make their business look riskier to international investors. Climate change has quickly become one of the more important risks faced by insurers.
The Next Leap Requires Real-Time Data and Predictive Tools
The industry is paying attention, but progress depends on better data infrastructure. Canada’s insurers have lagged in both collection and sharing, a problem now under review.
We’ve gotten smarter about the data we need. The question is how to get it and how to share it.
That includes setting up platforms that allow meaningful collaboration between insurers, government, academia, and industry.
Today, Canada still lacks a unified predictive peril map—something Chattree sees as a major shortfall. He envisions a national platform that merges datasets from Natural Resources Canada, private insurers, and the building sector to assess long-term exposure.
We don’t have a map that brings together public and private datasets to forecast risks.
Tools powered by generative AI and machine learning could help extract insights from disconnected datasets.
These technologies can support forward-looking product design and exposure modeling. But the tech only works if data-sharing rules and infrastructure evolve in step.
FAQ
The increasing frequency and severity of climate-related disasters across Canada have driven insurable losses to record levels. This has forced insurers to move from reactive responses to embedding climate resilience into strategy, governance, and operations.
Launched in November 2022, the strategy outlines goals across infrastructure, disaster response, ecosystems, health, and the economy. It serves as a foundation for federal planning and risk mitigation efforts that directly influence insurance risk modeling and regulatory expectations.
Insurers are restructuring operations to integrate climate data into underwriting and claims. OSFI’s Guideline B-15 requires scenario analysis, disclosure improvements, and climate integration into capital planning for federally regulated entities.
Regulatory misalignment, outdated legacy systems, and institutional silos across government, insurers, and construction sectors slow down the adoption of scalable, long-term climate resilience strategies.
Litigated claims are 22 times more expensive and take twice as long compared to those resolved through structured boards like the Injuries Resolution Board. Reducing litigation costs has become a core target of reform efforts to keep premiums affordable.
Insurers and government agencies are prioritizing the development of real-time, collaborative data systems. A unified national risk map combining public and private datasets remains a critical missing piece for predictive modeling and exposure assessment.
International frameworks, including those from the ISSB, are raising disclosure expectations. Canadian insurers are under pressure to align ESG and climate reporting to avoid appearing high-risk to global investors and regulators.
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AUTHOR: Nataly Kramer — Insurance Editors at Beinsure Media
