Canada’s cyber insurance market is showing signs of recovery after years of volatility, according to a new report from the Insurance Bureau of Canada (IBC). The report, The Canadian Cyber Insurance Market, highlights how improved underwriting practices, better loss predictability, and broader product availability have helped insurers regain balance. Between 2019 and 2023, the industry faced average combined loss ratios of 155%, driven by a surge in ransomware and data breach claims. These challenges prompted insurers to reassess pricing and tighten coverage terms, leading to a more sustainable market today.
However, the threat landscape continues to evolve, with artificial intelligence (AI) emerging as a major concern. Cybercriminals are increasingly using AI to automate and enhance attacks, such as phishing schemes that closely mimic legitimate communications. The report also warns about the rise of deepfake technology in fraud and impersonation, which complicates both prevention and claims assessment.
While insurance helps mitigate financial losses, IBC stresses that effective cybersecurity also requires strong legislation and regulation. The federal government’s reintroduction of Bill C-8, which includes the Critical Cyber Systems Protection Act, aims to enforce mandatory cybersecurity standards and improve incident reporting for critical infrastructure. Yet, progress remains uneven, and more consistent policy development is needed.
Public-private collaboration is key to tackling these complex risks. Initiatives like the Canadian Cyber Defence Collective and the National Cyber Security Strategy are steps in the right direction, but IBC emphasizes that deeper coordination is essential to build national resilience. Small and medium-sized businesses (SMBs), which make up the bulk of Canadian businesses, are particularly vulnerable due to underinsurance and limited resources.
To address this gap, IBC continues to promote awareness through its Cyber Savvy Canada campaign. As cyber threats grow more sophisticated, the report calls for continued innovation in underwriting and pricing, alongside stronger partnerships between insurers, policymakers, and businesses to safeguard Canada’s digital future.
Original article courtesy of InsuranceBusinessMag.com
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