Let’s face it—insurance premiums are going up, and both business and home owners aren’t happy about it. We get it. We see the frustration everywhere, and we understand why everyone’s looking for the lowest price. But behind every policy is a real reason for the increase—and it’s not just profit. Let’s take a moment to break it down, with facts, not fluff. Let’s look at the truth behind insurance rate hikes.
4. It’s a shared risk.
Think of insurance like Employment Insurance (EI). We all pay into it—even if we never use it—so there’s money to help those who do need it. Insurance works the same way. You might never have a claim, but your premiums help cover people who lose their homes, vehicles, or businesses.
3. Big disasters mean big payouts.
In Alberta alone in 2025:
- The Calgary hailstorm caused $2.8 billion in damage
- The Jasper fire cost $880 million
- Alberta still has the highest rate of vehicle theft in Canada
2. It’s the only business where you don’t know the final cost until the end of the year.
No one knows when the next fire, flood, or hailstorm will happen—or how much it will cost.
1. Insurance companies are businesses.
Like any business, they need to earn a profit to keep the doors open. But how much are they really making?
Let’s Compare That to the Banks
In 2023, Canadian insurers had an average net profit margin of 9.2%. Check out the Insurance Bureau of Canada’s “Facts Book“.
For comparison, Canada’s largest banks— RBC, TD, Scotiabank, BMO, and CIBC —reported profit margins ranging from 15% to 27%. That’s a big difference.
Despite what many think, insurance isn’t a “get rich” business—it’s about preparing for the unknown and protecting people when things go wrong.
Where Your Premium Goes
Here’s how the $83.5 billion collected in Canadian insurance premiums was used in 2023:
- 55% paid out in claims
- 21.7% covered operating costs (like salaries and claims handling)
- 14.1% went to taxes
- Leaving 9.2% as net profit
Final Thoughts
We know rising costs can be challenging. But insurance isn’t just a bill—it’s a safety net. And we’re committed to ensuring you receive good value and excellent service every step of the way.
Do you have any questions about your policy or premium? Let’s talk. We’re here to help you protect what matters—without breaking the bank.
And next time your business associate or neighbour is disgusted with their premium, send them our way. We want them to know the truth behind insurance rate hikes and how we can help.
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