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Canadian insurers have a window to act. It won’t last

Reshape finance. Scale through M&A. Put AI to work

Report | April 10, 2026 |

Canadian insurers are caught in a squeeze—rising costs, constrained growth, and an operating model under pressure. 

Regulations are increasing in volume and complexity. Inflation is eroding margins. Growth in core business lines is slowing. And with uncertainty clouding investment returns, portfolio income may not be enough to bridge the gap. 

Only 29% of Canadian financial services leaders (compared to 42% globally) say they’re very or extremely confident in their prospects for revenue growth over the next 12 months, according to our most recent Global CEO Survey. And it’s not hard to see why. 

Canadian insurers face structural challenges. Not passing headwinds. What’s needed is a shift—refocusing effort from maintaining the business to work that actually advances it—across how you manage risk, how you scale, and how you put technology to work. 

A finance function built to manage today’s risks—and tomorrow’s

No insurer can manage risk effectively without a finance function that’s keeping pace. It’s where financial disclosures are signed off, investment returns are managed, and budgets for transformation are controlled. Finance already plays a strategic role in many insurance organizations. But that role is under strain—from regulatory volume, aging technology, and structures that weren’t built for today’s demands.

Regulatory obligations have been accumulating for years. And the pace isn’t slowing. 94% of Canadian organizations across all industries (compared to 85% globally) say compliance requirements have become more complex in the last three years, according to our Global Compliance Survey.

94%

of Canadian organizations say compliance requirements have become more complex in the last three years.

PwC’s Global Compliance Survey

These new demands are forcing unfamiliar collaboration. Model risk management, for example, requires actuarial and finance teams to collaborate even more extensively—maybe in ways they haven’t before. Sustainability reporting poses a similar challenge: as climate disclosures evolve from voluntary to mandatory, accountability is landing squarely on the CFO—often without the budget, in-house expertise, or organizational clarity to support it. New obligations are outpacing the structures built to handle them. 

Technology debt compounds these complexities. When IFRS 17 took effect, it forced insurers to modernize. Many implemented temporary fixes to meet the deadline. But years later, those interim measures are still in place. Data that was supposed to migrate to ERP platforms is sitting in data lakes—disconnected from the systems that need it for reporting and decision making. Elsewhere, actuarial pricing at many firms still runs on legacy tools. And most insurers still rely on on-premises systems. 

The interim fixes many insurers adopted to meet the IFRS 17 deadline don’t have to limit your finance team. Our Managed Finance Solutions for Insurers use automation to streamline the end-to-end reporting process, from data ingestion and calculations to report generation, reducing the manual effort that stretches finance teams thin. 

But the value extends beyond compliance. By freeing up capacity, insurers can shift their focus from navigating reporting complexity to uncovering the deeper insights IFRS 17 data makes possible—supporting better decisions on pricing, risk, and performance. 

Learn more about our Managed Finance Solutions for Insurers

The runway to upgrade legacy systems is shrinking. ERP vendors are pushing their customers toward cloud and are unlikely to support legacy versions indefinitely. But cloud migration isn’t just about avoiding obsolescence. It’s about giving finance teams the integrated, real-time view they need to manage risk, close the books faster, and respond to regulatory demands without manual workarounds. The insurers that make this move gain a finance function that can better support the demands it faces. Those that delay are accumulating risk with every quarter. 

The path forward starts with connecting functions that years of growth have fragmented. Some of the largest life insurers are already moving—embedding a better, more robust control model across their entire enterprise to reduce duplication and gain scale, particularly in areas like anti-money laundering (AML) and know-your-customer (KYC) compliance. It’s an approach many banks have already adopted, and insurers are now following suit. At scale, it justifies investment in more robust tooling and frees up capacity to address higher-risk decisions. 

When finance, actuarial, risk, and compliance operate in concert rather than in parallel, the finance function can move beyond managing regulatory volume and play a more strategic role in the business. 

Your finance function shouldn’t just keep up. It should lead

We can help you make that shift

Scale with intention 

For most Canadian insurers, organic growth alone won’t deliver the scale they need to thrive and be sustainable. That sentiment is reflected in our CEO Survey: 55% of Canadian financial services leaders are planning at least one major acquisition in the next three years, compared to 42% globally.

55%

of Canadian financial services leaders are planning at least one major acquisition in the next three years.

PwC’s 29th Annual Global CEO Survey

The capital is available. Institutional investors, financial sponsors, and the public markets continue to have a strong appetite for all aspects of the insurance sector. That capital will be put to work backing continued consolidation and funding significant inorganic transactions, especially asset-intensive deals. 

The conditions favour proactive and bold action. However, M&A is a way to execute strategy—it’s not a strategy on its own. Scale alone doesn’t create value. It takes a clear integration roadmap and value creation plan to turn deal activity into actual, sustained performance benefits. 

We see three distinct dynamics reshaping the Canadian insurance market, including: 

Independent brokerages have consolidated at a rapid pace for the last ten years, largely through private equity-backed platforms, but increasingly through carrier-backed ones as well. We’re now entering the second phase of the consolidation lifecycle, where aggregating platforms recapitalize and change hands—to private equity, pension funds, or other buyers. This typically drives additional M&A activity as new owners focus on creating value. 

The increased scale of broker platforms has redefined the balance between carriers and distributors. As brokers consolidate, they gain scale—and with it, negotiating leverage with the carriers whose products they distribute. This is driving an intensifying fight for distribution—independent brokers are competing to grow, while carriers are pushing to own their own channels. This fight is changing how both carriers and brokers think about minimum efficient scale.  

Canada’s largest property and casualty (P&C) carriers are diversified and performing well, despite a softening market. But many others are not. For small and mid-size carriers, scale is no longer a long-term aspiration. It’s a near-term necessity for survival. 

Definity’s acquisition of Travelers Canada was a watershed moment for the market. It demonstrated that even large and complex transactions can be executed successfully in the Canadian P&C space—and overnight, it expanded the pool of deals the market considers achievable. What were once hypothetical targets are now potential opportunities, setting the stage for a new era of proactive and aggressive deal making. 

The opening is widening, with multinational carriers reconsidering whether Canada is core to their strategy. As some step back, domestic insurers have an opening to grow their market presence and expand their product base and distribution channels.

The focus on sustainable earnings has forced P&C insurers to look at other ways to drive loss ratio improvement, including owning more of the value chain. Transactions like Intact’s acquisition of home maintenance business Jiffy show how P&C insurers are moving to better control their largest expense. The next frontier is preventative, from telematics and home security to other technologies that help reduce attritional losses before they occur. 

In life and health, the logic is different but equally compelling. As value shifts toward meeting people’s financial needs across different life stages—protection, savings, and retirement—life and health insurers are naturally positioned to expand their existing customer relationships into adjacent spaces like wealth advisory, asset management, and direct payer-provider services. iA’s acquisition of Richardson Wealth, which created one of the largest national independent wealth management platforms in the country, illustrates this trend. 

Our 2026 Canadian M&A Outlook found a parallel wave of consolidation in wealth management, driven by an intergenerational wealth transfer and growing demand for integrated advisory solutions. For life and health insurers, these converging forces point to a significant growth opportunity—one that reshapes what it means to be both an insurer and a broader player within the financial services ecosystem. 

Putting artificial intelligence to work in insurance

AI isn’t new to the sector. Insurers have used machine learning in actuarial and pricing work for years. But what insurers are actually doing with AI in 2026 varies widely, with many companies in early stages of adopting generative and agentic AI—technologies likely to reshape how insurance works. 

The window for a fast mover is still open. No single insurer has pulled far enough ahead to force a market-wide response. But there are real barriers to moving quickly. The Office of the Superintendent of Financial Institutions’ (OSFI) model risk management guidelines require a principles-first approach to AI deployment. And adopting generative and agentic AI takes a cross-functional effort that demands new skills, new governance structures, and new ways of working together. 

It’s a significant undertaking, and most aren’t there yet: only 37% of Canadian financial services leaders say their organization has a clearly defined AI roadmap, according to our CEO Survey, compared to 49% globally. 

37%

of Canadian financial services leaders say their organization has a clearly defined AI roadmap—notably less than the 49% of financial services leaders globally.

PwC’s 29th Annual Global CEO Survey

But the prize is worth pursuing. Agentic AI has the potential to rewrite the economics of core insurance processes. In commercial underwriting, for example, much of the work currently involves gathering and organizing data—risk profiles, maintenance records, geographic exposure, and more. Agentic systems can handle that aggregation. Consider a brokerage that has underwritten hundreds of restaurant franchise locations across the country, each through a different branch. Today, that data sits in silos. An agentic system could rapidly pull it together, giving the underwriter a richer basis for judgment and a faster path to quote. The result is a stronger competitive position. 

Capturing this opportunity requires trust. For insurers, responsible AI is interwoven with two priorities: making sure AI-driven decisions treat customers fairly, and meeting regulators’ expectations for how AI is governed. Organizations that take a risk-based approach—calibrating oversight to the application rather than applying blanket restrictions—position themselves to adopt AI with confidence rather than hesitation. 

Yet just 43% of Canadian financial services leaders (compared to 49% globally) say their organization has formalized responsible AI and risk processes, according to our CEO Survey. For Canadian insurers, getting responsible AI right isn’t a barrier to progress. It’s what makes sustained progress possible. 

So what does it take to capture the full potential of AI in insurance? Three things stand out: 

Coherence: An AI strategy that makes sense across your entire enterprise, not just in pockets. 

 

Conviction: A genuine belief that this technology is unlike what came before, and that waiting carries more risk than acting. 

 

Commitment: Not just to the technology, but to the people who will use it.

Our research shows commitment is one area where gaps persist. In our Global Workforce Hopes and Fears Survey 2025, 67% of Canadian insurance employees say they have access to learning and development resources. But only 49% say they learned new skills at work in the last year that are helping their career. Access alone isn’t enough. Without opportunities to apply new capabilities on the job, organizations risk losing much of the value of their AI investments. 

This isn’t a time for half measures. The best ideas won’t necessarily come from the top down. Often, they’ll come from the people closest to the work. But that’s only possible if those people have the tools, the training, and the opportunity to put them to use. 

What comes next

Insurance helps underpin the real economy by giving people and organizations the confidence to invest, build, and grow. That purpose isn’t going away—but the way insurers fulfill it is changing. The ones that build a stronger finance function, scale with intention, and deploy AI with purpose will be positioned to create more value for their customers, their shareholders, and the broader economy. 

The window is open. Let’s move

We’ll help you reshape finance, scale with purpose, and put AI to work

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Keegan Iles

Keegan Iles

National Insurance Sector Leader, Partner, Strategy&, PwC Canada

Tel: +1 416 815 5052

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Jordan Baimel

Jordan Baimel

Deals Financial Services Leader, PwC Canada

Tel: +1 416 687 8014

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Brenda Vethanayagam

Brenda Vethanayagam

AI Trust Leader, PwC Canada

Tel: +1 416 815 5228

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