Canadians want more flexible, personalized insurance solutions. Does your organization have what it takes to deliver?

Key takeaways:

• Canadian insurance faces a convergence of challenges, including evolving customer expectations, technological advancements, and macroeconomic changes.
• Customers expect more flexible, personalized insurance solutions that fit with their lifestyle and values.
• Today’s insurance organizations need to shift from protection-focused business models to long-term financial security, prevention, and well-being.  

The Canadian insurance industry is approaching an inflection point, and its products and services, profit pools, and business models need to keep up. By 2035, the industry will pivot from protection-focused business models to long-term financial security, prevention, and holistic wellbeing. This is an inevitable response to evolving customer expectations, technological advancements, climate extremes, and macroeconomic, regulatory, and geopolitical challenges.

Is your organization ready to respond to this change?

Deloitte’s insurance leaders have identified a set of key macro shifts that can fundamentally change the role insurers and ecosystem partners have, and the value they deliver. Investments made now will be critical to future-proofing businesses and positioning insurance organizations for long-term relevance, sustainability, and profitable growth.

What’s happening in Canada’s insurance landscape?

In recent years, the Canadian Life & Health market has experienced healthy growth, driven by increasing demand for expanded health coverage needs and retirement and savings solutions. Property & Casualty growth has remained relatively flat, with growth largely being rate-driven.

As structural tailwinds stabilize and market dynamics evolve, new megatrends are set to influence and drive change at an accelerated pace over the next decade:

• Aging population: As Canada’s population ages and life expectancies rise, insurers need to address the growing demand for protection and health services for individuals with high-impact chronic conditions. This demographic shift raises important questions about the adequacy of health coverage today, alongside evolving needs for property protection, long-term care, and financial security.
• Widening protection gap: A growing middle class and widening protection and retirement gap calls on insurers to consider how to provide services to high-risk, catastrophe prone, and under-insured communities and regions that are disproportionately affected by current disparities in wealth distribution, financial access, and adequate protection.
• Evolving lifestyles: Traditional orthodoxies, norms, and timelines are changing as the younger generation is rethinking the notion of asset ownership and delaying or deferring life events. Consumers now seek products and experiences that can be customized to align with their sequence of life stages and events.
• Future of mobility: The future of mobility will see a shift towards on-demand and shared transportation, as traditional car ownership becomes less attractive in urban centres. We’re seeing a growing emphasis on multimodal travel and sustainable practices, such as ride-hailing and car-sharing services, autonomous and electric vehicles, and micromobility options.
• Proliferation of AI & technology: A proliferation and consumerization of digital and technology will see IoT, wearables, and sensors generating continuous data streams become even more commonplace as part of connected ecosystems, in addition the rise of emerging technologies (e.g., AI, generative AI, agentic AI, quantum), and open data.
• Uncertainty of the global environment: The world is shifting into a state of continuous disruption, as the future is dominated by more frequent geopolitical crises, macroeconomic tensions, and increasing levels of threats, such as major supply chain disruptions and cyber-attacks. Volatility is the new baseline, and resilience becomes the ultimate competitive advantage.
• Climate crisis: A worsening climate crisis is marked by more frequent extreme weather events and natural catastrophes that significantly affect the environment, society, and businesses and disproportionately impact regions that have historically been underserved.
• Evolving roles of the public and private sectors: Continued changes to public policy and the roles of public and private sectors are evolving through new commercial or strategic arrangements. These changes introduce new funding and business models, and address existing protection gaps in healthcare, social services, and climate resilience across underserved and at-risk segments and communities.

Five shifts driving the future of insurance

In the decade ahead, we expect to see forward-thinking organizations seizing this moment to chart new pathways for profitable growth. Through this next wave of change, we anticipate five transformative shifts that will enable insurers to reimagine business models, reshape value propositions, and expand the industry’s role beyond protection.

1. Sales & Distribution: Shifting from transactional sales to “always on,” data-driven advice

Advice will be deeply personalized, contextualized, and embedded within every interaction and touchpoint. Advisors, brokers, and benefits consultants will leverage intelligent tools to deliver meaningful insights that help customers manage risk, optimize their protection portfolio, and benefit from personalized guidance across the household or organization.

Human advice and expertise will remain essential for complex and bespoke needs. However, digital channels will become increasingly prominent for accessing insurance solutions. This will include the use of virtual and digital advice options, as well as dynamic product design and pricing capabilities, which we already see through the gradual disintermediation of advisors in P&C personal lines.

AI and modern core platforms can profitably reach customer segments left underserved by traditional channels. Insurers can also leverage new embedded distribution channels to more naturally meet customers where they are.

2. Product & Pricing: Evolving from protection products to outcome-oriented solutions that expand profit pools

As profit pools shift and industries converge, insurers will need to evolve from selling static products to delivering modular, outcome-oriented solutions that blend protection with prevention, wellness, and financial wellbeing. This shift redefines the product value proposition. Solutions should be flexible, affordable, and designed to improve outcomes, whether through integrated health diagnostics tied to critical illness coverage or connected-home services that prevent property loss.

3. Customer Engagement: Moving from reactive interactions to proactive, personalized and human-centered experiences

Existing servicing models will shift from episodic transactions to always-on relationships. These relationships are proactive and personalized, and drive engagement that anticipates life events, incentivizes lifestyle changes, and tailors coverage dynamically. Digital-first engagement will be the foundation, but human touch will remain essential in the moments that matter most.

It will be essential to meet customers where they are, and how they want to engage across channels, ecosystems, and life stages. Insurers need to tailor experiences to the unique needs of each consumer or business segment, based on where they sit on the “spectrum of trust.” Regardless of where customers fall, insurers will need to create connected experiences that blend intelligent technology, human empathy, and meaningful interactions that in turn deliver sustainable value, differentiation, and loyalty.

4. Operations: Reimagining insurance operations through emerging technology and AI

AI will no longer be seen as a discrete capability. Instead, it will be embedded in an insurance organization's DNA, and scaled horizontally across functions, workflows, and roles.

Modern core systems that allow for greater scalability and speed-to-market will finally replace monolithic legacy systems. The organizations that will thrive in the future of insurance will be those that seamlessly integrate human expertise and modern platforms with intelligent automation to drive efficiency, personalization, and trust. This could include interconnected healthcare journeys at the time of a claim or enhancing underwriting precision through predictive analytics.

Success will depend on how well insurers connect their data, technology, and people to deliver impact at scale, creating what we call a “string of pearls” across the organization. Each “pearl” is a valuable capability, like claims intake, triage, or fraud detection, but the real power comes when they’re connected. When these parts share information and learn from one another, value begins to compound, decisions get faster, experiences improve, and the whole system gets smarter over time.

5. Strategic Partnerships and M&A: Accelerating innovation and value expansion through ecosystem partners

As the boundaries between adjacent arenas continue to blur, insurers can’t win alone. To stay competitive, carriers should think differently about how and where they source capabilities. This means building resilient and highly differentiated capabilities in-house, while partnering where it enables speed-to-market and access to niche capabilities, or extends reach into new ecosystems.

Those that expand their value equation will foster strategic collaboration across arenas such as health, financial services, retail, OEMs, and technology providers. This rings even more true for organizations that embed AI in their solutions. The result? They’ll deliver holistic, data-driven experiences that meet evolving customer needs. In this future, insurers are not just protectors but orchestrators of connected well-being and value creation, focusing in-house expertise on value chain functions that deliver tangible value and unique means of differentiation.

Are you ready for the future of insurance?

The convergence of megatrends is reshaping the industry at a pace and scale that demands a proactive response. Success will belong to ecosystem players who anticipate disruption, adapt rapidly, and align their business models and value propositions to these shifts.

Assess your organization’s readiness by asking:

1. Is AI embedded in the fabric of your business model, or do you still see it as a standalone capability?
2. Does your organization have the brand permission to deliver value beyond core protection?
3. Are you clear on how your customers want to engage with you, and how your organization will balance scalability with empathy?
4. Is your sales function equipped to deliver “always on” insights and advice across interconnected experiences?

Unsure how your organization measures up? Connect with a leader below to discuss your future insurance strategy and prepare for what’s next.