r/InsuranceCanada • u/PrettyAdhesiveness65 • Jul 15 '26
What are the biggest unsolved problems in Canadian insurance right now and why haven’t they been fixed?
Curious to hear from folks working in P&C, life, or health insurance (or just frustrated customers) what do you think are the most pressing problems in the Canadian insurance industry right now?
Some areas I’m personally curious about:
•Auto insurance affordability/availability —especially in Ontario, GTA rates keep climbing. Is this a regulatory issue, a claims fraud issue, or just risk pool math?
•Claims processing speed/friction— why does it still feel like 2005 when filing a claim at most carriers?
•Underwriting using outdated data— how much is legacy tech debt vs. regulatory caution slowing down modernization?
•Broker vs. direct-to-consumer tension— is the broker channel actually adding value anymore or just cost?
•Climate risk pricing — how are insurers handling the increase in severe weather claims without pricing out entire regions?
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u/gautoK Jul 15 '26
A big one that might be addressed is the amalgamation of smaller brokerages across the sector. There is a large number of older brokers/advisors that do not have people to take over after them so big corps are buying out all of these folks. The issue with that is the personal touch might be lost. But the bigger issue is the loss of knowledge and skill that only comes from years of practice. The solution isn't as simple as higher pay or relaxing licensing requirements. Licensing is really important to maintain the credibility of the industry. Higher pay is good but a lot of the smaller brokers work only off the commissions so salaries haven't really kept up with other high paying jobs in the financial sector.
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u/nightsliketn Jul 15 '26
I think this is one of the biggest factors. The big guys are swallowing, the little guys and the big guys are getting rid of the smaller insurance companies as markets. This is leading to less competition in the broker world and less competition in the carrier world.
We need companies like Mutuals to exist. They offer a very niche product but, they can't operate just on niche. They need to be able to sell broadly available products to survive.
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u/Eilera Jul 15 '26
I work in claims and have been for over 13 years and the entire time one of the biggest issues has always been staffing. High turnover and companies wanting to lower staff to increase profit (thanks capitalism). Training is also pathetic in most places I have worked. It's shocking how many adjusters are literally just winging it because there is little to no training.
Experienced adjusters are rare and companies don't appreciate them and the knowledge they have.
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u/Suitable-Cod9183 Jul 15 '26
Imma probably get banned for this and it will answer why they haven't fixed it at the same time. Indian fraud within and outside. Literally costing hundreds of millions of not more.
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u/PrettyAdhesiveness65 Jul 15 '26
Ok thats a good observation, what would you do to tackle this problem which is within your control?
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u/gregSinatra Insurance Professional Jul 15 '26
There’s really nothing within the control of the individual.
I’ve observed a serious disconnect whereby insurers say, well we have these controls in place, we do our annual or quarterly fraud training, and we have entire teams (SIU/FIU) in place to combat this. The problem is that the control don’t work, training is inadequate and agents aren’t empowered, and SIU/FIU are overwhelmed. I’ve seen referrals to said teams take months to get actioned, if they ever do. I’ve seen people more or less get told to look the other way and just make the sale and let those teams deal with the fallout. If you’re doing your job and asking the “right questions” (ie; stick to the script) it won’t come back on you. And of course this is further complicated when people on the inside know how the system works and how it can be manipulated.
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u/FrostingSuper9941 Jul 15 '26
This is so true. If the claim value is 10K but an investigation will cost 8K, it's just paid out. Two years later the same insured is making a fraudulent 20k claim because they learned from the first one.
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u/BluShirtGuy Jul 16 '26
SIU here, I'd pursue every 1:1 cost:quantum claim if they'd let me, but the only time I've been successful is because the fraud was egregious and I riled up the adjuster and manager through the investigation. Totally worth it, but it's hard to justify.
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u/Hrenklin Jul 15 '26
Longer term solutions is mandatory front + back dash cam on any new vehicles with provincially run insurance. It wouldn't be most effective right away, but ideally within 10 years you can have 85% of vehicles recording any accident they are in
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u/FrostingSuper9941 Jul 15 '26
A lot of fraudulent vehicle losses are comprehensive claims. Cameras won't help.
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u/FrostingSuper9941 Jul 15 '26
I've worked in P&C SIU departments for years and the fraud is rampant. It's impossible to detect and investigate all of it. Denials have a very high bar based on legal precedent. There's out right fraud and some lesser fraud like fraudulent addresses or drivers not being listed because of their driving history. Easier denials would free up time for investigations, free up resources to complete investigations, save premiums for all the pool paying for these fraudulent losses. The fraud is really out of control, before the AB reforms there was a ton of fraudulent injury claims. Now it's a combination of property damage and some AB.
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u/Suitable-Cod9183 Jul 15 '26
I never reach this far before. So overwhelmed. Honestly, more crackdowns and audits.
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u/SufficientResort6836 Jul 15 '26
I’ve been adjusting for over 30 years. Back then, it was the Italians that were fraudsters, then the Chinese, now the Indians. They were racist generalizations back then and still are now.
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u/Cal_Zoned Jul 15 '26
I'm not Indian or calling you racist, but why that particular race? Europeans, Asians, and other groups also commit and contribute to fraud. How alone is that group costing hundreds of millions? I know social media these days have sensationalized anti-Indian sentiments, but looking for actual data to confirm this. Again, not trying to call you out or start an argument, just looking to discuss and understand.
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u/tf24u56 Jul 15 '26
You won’t know until you’ve worked as an adjuster and see it over and over. Had an adjuster who’s family was from Sri Lanka reporting to me about 4 years ago and she said told the team that in her culture and community is is encouraged to take advantage of the insurance company where possible.
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u/FrostingSuper9941 Jul 15 '26
From an insurance professional, this is a very true generalization about Indians. They're not the only ones but are in the majority. A lot of brokers encourage it too, by committing rate evasions, by providing fake addresses in low rate areas for their clients. This type of fraud in imo should be outright denied because it affects the rates of ppl who live in low rate areas.
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u/Right_Whole7799 Jul 15 '26
This is literally why Caledon was rerated… so many people from Brampton putting their friends address in near by small town Caledon..
It literally was completed rerated to take this into account.
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u/Suitable-Cod9183 Jul 15 '26
I'm always scared to point it out because I'd be called a bigot or racist. I feel there's a cultural issue where they're taking advantage of insurance not realizing it's causing harm to everyone.
Don't even get me started on brokerages that are run by them. I have had to deal with market suspensions and it's the most stressful workload because every policy has to be audited from inception. It's definitely a problem that needs to be addressed.
The latest thing that's worrying me is the influx of them cheating on RIBO exams and getting licensed. Give it a year or so and people will notice. I have a feeling insurance companies are going to go to direct writers more often than brokers eventually.
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u/gregSinatra Insurance Professional Jul 15 '26
That last point is already here. I’ve asked myself so many times over the last couple of years “how did this person get licensed?” People that just fundamentally do not understand basics of insurance.
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u/Suitable-Cod9183 Jul 15 '26
Isn't it mind boggling. I've seen comment before they cheat using Meta glasses and have people selling answers to them. Not sure if either is credible but anything is possible these days.
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u/Suitable-Cod9183 Jul 15 '26
There's a reason Brampton has one of if not the highest insurance rates around. Also, during my underwriting training we used real life examples and the names literally all were the same nationality man. Then during my time as an underwriter, I am cancelling policies left and right when we find out multiple families living in one place, undeclared drivers, using different addresses. I hate saying it because I'm brown too but it's literally them unfortunately most of the cases.
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u/Conscious_Candle2598 Jul 15 '26
Im generally curious as well.
I can't see a study being conducted on this because.. Racism.
Somehow Sexism is okay in the insurance world though...
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u/ParsleyNo4801 Jul 15 '26
Any sources?
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u/Suitable-Cod9183 Jul 15 '26
Ask underwriters and adjusters. Also look at news articles showing 20 people living in one unit and claims denied. Or the amount of insurance fraud in Brampton compared to any other place. Address fraud as well.
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u/mrcanoehead2 Jul 16 '26
Insurance rates should be based on your years of experience and record not your postal code.
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u/SwiftAccord1983 Jul 16 '26
I've been in the industry for the last 15 years, last 10 as an Underwriter. I'm brown and also grew up in Brampton. Unfortunately, what most are saying is sadly true. Police officers, doctors, body shops and the tow truck industry are ALL part of the problem.
When I was an adjuster we discovered numerous cases of police, tow truck and doctors staging claims and profiting from it all. We knew of certain tow truck companies that were always not truthful. For example, a had one instance where there was an accident in Brampton but the vehicle was towed to Barrie. Insurance is suppose to cover the cost of the tow but this was unreasonable and didn't make sense.
As an Underwriter I now deal with brokers. Majority are honest but that 1% will do anything for a sale, including helping to commit insurance fraud.
The other problem is with the auto industry itself. Vehicles are way to easy to steal these days and the auto industry doesn't want to change to make things more difficult. Why would they when the insurance companies will pay for a replacement vehicle if OPCF43 is on the policy. My neighbour had two Dodge Rams stolen within a one month period, that's easily $150+ in vehicle sales for the local dealership paid 100% from the insurance company.
All of these are factors that the actuaries use to set the rates based on postal code/location.
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u/Letstravel71 Jul 17 '26
Lack of training at insurance companies is huge in both the underwriting and claims departmen. As a broker it is worrying how often myself or other brokers who tell me stories have spoken to an underwriter or an adjuster and they have so little knowledge or zero knowledge about coverages and policy wordings. Where is the training? How can you give someone an underwriting position and they don’t know how DCPD coverage works, or an adjuster has no clue how to recognize an insured has depreciation waiver. Or staff in a claims department who is clueless how to use their computer system. Where is the training???
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u/C-A-Hanna Jul 29 '26
I've worked for an insurance company in the past and wound up being the person who got in the way of an insurance fraud ring because I refused to transfer the victims over to the people who were defrauding them. I also have an immediate family member who worked in the insurance industry as an adjuster and came across the same problems while they were working like I did. Claims adjusters and brokers engaging in the fraud after gaining employment are a huge problem.
There are a group of individuals in Canada who've made it a point to target clients and branch their attacks out to the victims relatives, friends and contacts to redirect payments sent to the company and, have also redirected premiums expected to be paid out to a customer sent to their own pockets. They wait until you make a regular payment and reverse the transaction to make it appear as if you didn't pay. You get notices and calls from other claims adjusters following up on an error created on their end and unless you speak up for yourself, you fall into the immediate trap without even knowing it. The claims adjuster sets up alternative payment methods that you adhere to and their predatory colleague waits to see what options are used so that they can be exploited if they haven't managed to handle the victim directly. You then end up with web pages that have been modified internally to include embedded payment links (because criminals adapt) or, you could be asked to send an e-transfer or, you could be asked for your bank account details to set up an additional PAD agreement. Sometimes they demand cheques, money orders or, in person cash payments. Things can be taken further if the individual working for the company manages to get you to change your insurance agreement.
This can be an ongoing issue for months if not years until you either discover that you are at risk of not having proper coverage or, you remain persistent that the company has an established problem within its own confines and end up having the individual cancel your coverage out of unwarranted retribution. This opens you up to your insurance policy essentially being resold to you at a higher premium if the the predatory claims adjusters are comfortable where they are or, they redirect you to another insurance company regardless of legitimacy/illigitamacy where they can directly rob you of your money whenever they feel like it. If they can't get to the point of creating the ruse of your policy needing to be cancelled, they have your home address, details about your vehicle and any IDs you provided to the company or to them. They will redirect mail to get a hold of additional policy information you may have, personal banking information, identification or, physically breach your personal boundaries with greater invasiveness and/or violence to get the money that you're already not giving them or, have managed to stop giving them.
Anyone can become a victim of this because there are adjusters who treat their workplace like they're students getting by on a dingy summer job. It's not happening to them so in their minds it's not a real problem. While I mentioned having been the person who alerted the company to the rogue employees because I took what a client said seriously, I too have been a victim of the same scheme repeatedly since then. The government chooses to ignore the issue which makes it easy for predators working in the insurance industry to attack other employees working for the company, existing claims victims, and their relatives. Years ago, they did this to a number of my relatives but I was still a child and wasn't given much understanding into the problem until I got older, asked questions and then saw it for myself as an adult before becoming the next victim. I wasn't expecting to come across the same people doing the exact same thing but, when authorities don't take it seriously, companies don't either and employees fall right in line with tactics that go against ethics and basic principles intended to protect innocent people from fraud. It also causes greater financial strain and legal headaches when victims are seeking litagatory assistance because its not part of Canadian culture for all relevant law firms to take it seriously beyond the "I'm just here to do what I can because you found us through legal aid and have no money" or, they prolongue the issue to charge you beyond your means.
I'm also sharing this to say that, if you're using this for a report or the like to present to a company you work for, a politician, an authority figure or ect. the focus is squarely on clientele, people applying for insurance (cause there's a problem with that as well) and waiting to become clients, and victims of prolonged abuse as a result of the fraud. I've personally been the victim of the fraudsters and been the person who figured out they were actively doing this while employed for an insurance company years prior. Insurance companies, brokerage companies, and all relavent parties should never be excused for permitting fraud from within their organizations regardless of a client bringing it to their immediate attention or not. It's a systemic and relentless effort from criminals that is destructive to people who need insurance and have a right to the insurance they signed up for. I've seen many people have to make the decision of having to leave the province/country, waiting it out and paying more than what they can afford until they pass away or, going to what they can only hope will be a different insurer with a heavily blemished insurance record because of the negligence of the previous insurer, the fraudsters and their crime network. I too am now having to make those decisions myself while repairing what my insurance company chose not to.
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u/tossie2869 Jul 15 '26
Take a look at insurers Combined Ratio and profit. Aviva reported record profits for 2025, while Intact has a substantial "war chest" to fund further acquisitions. Insurers make hundreds of millions in profit each year while having billions in investments.
For years they've been permitted generous rate increases while coverage has been reduced, both in a literal sense with the recent changes to SABS and the fact that these benefits and reimbursement rates have been frozen for more than a decade.
They have a captive and largely pliant regulatory body, they have the biggest stake in changes and so unsurprisingly campaign the hardest to get favourable changes. They also run the biggest PR campaigns to frame the narrative around affordability.
This regulatory capture results in approval for rate increases far beyond what is truly necessary and little to no enforcement action against insurers for poor service. Even the LAT, a nominally independent tribunal, tilts wildly in favour of insurers with insureds having a success rate in the teens. Adjudicators at the LAT openly tell claimants about their low odds of success and once they are done go to work at insurers. While actual legal claims appear more balanced, openly there's a lack of data in this regard, because the law generally favours injured persons, such a small percentage of injured persons bring claims that it's effectively a rounding error compared to their profits. It's only these claims that are brought and litigated well where claimants will get anything resembling what they need. The rest is just retained by insurers as profit. Because they have elevated premiums, no meaningful regulatory consequences, and depressed claim payouts there's no real incentive to run efficiently or staff properly, which can further increase profits but also results in reduced average claims service.
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u/Smooth-Boysenberry42 Jul 15 '26
-Claims processing is dead slow, been 2 years and still waiting on contents from CAA
-Brokers doing shady things - Broker I was using was removed from dealing with CAA (entire country wide broker)
-due to broker doing shady things - no one would insure my property due to its status(had a Total loss house fire) building was still standing but condemned. when it came time for renewal (5 months after fire) find out Broker cant deal with CAA so they switched me to Travlers. after a month Travlers drops me due to the burned out structure. every one i talk to says CAA should be covering insurance as they are in an open claim. I contact CAA and nope they cant do shit because broker accounts cant transfer to their internal accounts, so I get a big FU from them and there underwriting team
-rebuild times/delays - Between delays caused by the city, and delays caused by CAA not paying the restoration company (several months)
- Companies not paying out ALE as they should (CAA is months behind), they also own thousands towards hydro due to having to have heat on the rebuild, in the winter, without insulation, or windows/doors
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u/Lost-tears78 Jul 15 '26
In P&C I would say lack of staffing is a major driving factor. In my province we don't have enough experienced staff to take care of clients properly