Severe weather events in Canada last year led to significant losses for the insurance industry. Aviva Canada, the second largest property and casualty insurer in the country, wasn’t spared.
While Aviva’s Canadian arm declared good underlying results for the full year of 2024, its combined operating ratio rose to 98.5% from 95.3% in 2023.
“It was a year of challenges, a year of growth, but also some really important achievements for us,” said Aviva Canada chief executive Tracy Garrad (pictured). “Our primary focus has absolutely been on helping customers recover from extreme weather events.”
While extreme weather took a toll, Aviva Canada still posted impressive growth. Personal lines saw a 13% increase, driven largely by new customer acquisitions in Ontario and Quebec. Its commercial lines business also expanded by 7%, fueled by both new corporate clients and premium growth.
Aviva Canada balances claims costs and customer experience
According to Garrad, Aviva Canada rose to challenges posed by the wave of catastrophe claims that followed a summer of storms and a record year of extreme weather.
"I'm particularly proud of how our people have shown up for our customers. Against the backdrop of all those catastrophic claims, our teams did outstanding work to improve customer experience while also managing claims costs,” Garrad said.
She also noted the cyclical nature of claims costs and how they ultimately impact pricing. Aviva Canada has focused on maintaining rate adequacy and underwriting discipline.
“The more we can contain (claims costs), the better,” she said. “The teams have been particularly focused upon continuing to refine and improve our claims experiences, as well as ensuring rate adequacy and underwriting actions across both of our lines.”
The insurer has taken a proactive approach to claims cost management. One of its key initiatives is its auto care centres, which it continued to expand last year. The company now operates nine body shops with dedicated capacity. "Our data shows they result in faster cycle times for customers, higher NPS scores, and better commercial outcomes for us,” Garrad said.
Operating nationwide comes with its own set of challenges, particularly in Alberta, where Garrad said Aviva Canada saw a drag in its results. Alberta’s regulatory environment and its persistent rate cap on auto insurance has been a persistent issue for carriers, and Aviva Canada is no exception.
"I think I'm not the only one that will speak about that, I'm sure, and we're continuing to engage with the regulators there around how we collectively need to address the cost drivers in the system in Alberta," said Garrad.
Driving climate resilience with new partnerships
Looking ahead to the broader property market, Garrad said Aviva Canada has been working closely with various stakeholders to promote resilience. "I think the first and most important thing is advocacy," she said.
One example is the company’s partnership with Wildfire Defense Systems, a service launched last year for homeowners in Alberta and British Columbia. The initiative proved successful, demonstrating its value in real-world conditions.
“We had never used them before, but they were able to go on-site and provide emergency risk mitigation measures,” she said. “We know this has saved us money and spared our customers the inconvenience of major property damage.”
The company is also exploring additional protective measures, including water leak detection devices. It has partnered with organizations like FireSmart and the Institute for Catastrophic Loss Reduction to boost customer education, something Garrad considers vital.
“Last year, we launched several campaigns aimed at consumers, brokers, and agents to help them understand the steps they can take to protect themselves,” she said.
Beyond customer engagement, Aviva Canada is also working with the construction industry to develop new standards for resilience for perils such as wildfire and flood. The company has joined a task force with the Institute for Catastrophic Loss Reduction (ICLR) and the Canadian Home Builders Association to help work on climate-resilient designs and building materials.
As for the future, Aviva Canada is actively exploring new opportunities. Commercial lines remain a key area of focus, as is meeting Canadians’ needs.
"We are always looking for opportunities to grow and expand our products," Garrad said. "Our commercial lines business especially is going from strength to strength, and we hope to expand our presence in the business space even more than we have today.
"Our strategy is always really centered around understanding customers’ unmet needs and then seeking to come up with propositions that are going to address those gaps.”
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