SMEs underinsured as Canada’s cyber landscape shifts
The cyber market in Canada steadies, but AI-enabled attacks raise stakes for insurers and businesses.
Canada’s cyber insurance market is stabilising, with stronger underwriting, steadier loss trends, and more product choice, the Insurance Bureau of Canada says. But the threat landscape is accelerating as attackers weaponise AI, leaving many small and medium-sized enterprises exposed and underinsured.
Rapid market growth brought painful losses during the ransomware surge: from 2019 to 2023, combined loss ratios averaged about 155%, forcing tighter pricing and coverage. Insurers have recalibrated, yet rising AI-enabled phishing and deepfake impersonations are lifting complexity and potential severity.
Policy is catching up unevenly. Bill C-8 in Canada would revive critical-infrastructure cybersecurity standards, stronger oversight, and baseline rules for risk management and incident reporting. Public–private programmes signal progress but need sustained execution.
SMEs remain the pressure point. Low uptake means minor breaches can cost tens or hundreds of thousands, while severe incidents can be fatal. Underinsurance shifts shock to the wider economy, challenging insurers to balance affordability with long-term viability.
The Bureau urges practical resilience: clearer governance, employee training, incident playbooks, and fit-for-purpose cover. Education campaigns and free guidance aim to demystify coverage, boost readiness, and help SMEs recover faster when attacks hit, supporting a more durable digital economy.
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