Secondary Perils Are Now Structural Risk for Canadian Carriers

AI insurance claims processing is revolutionizing catastrophe management in Canada, addressing challenges from frequent natural disasters. It enhances vendor coordination, minimizes ALE leakage, and improves customer experiences through effective data use and automation. Key advancements include damage assessment, claims prioritization, and unified vendor management, all aimed at optimizing response efforts and efficiency.

Written by

Atlis AI

—

March 23, 2026

Atlis’ Key takeaways from Swiss Re sigma 1/2026.

Wildfires, Storms, And The New Canadian Risk Reality

Swiss Re’s sigma 1/2026 report shows natural catastrophe insured losses hit USD 107B globally in 2025, with a record 92% coming from “secondary perils” like wildfires, floods, and severe convective storms. These aren’t one‑off mega‑hurricanes; they’re the kind of events Canada is now seeing every year. Canada’s own 2024 numbers (C$8.5B in insured cat losses, record wildfires, repeated floods) fit this pattern of mid‑sized but relentless events that hammer operations as much as they hit loss ratios.

For carriers, that means the old model—treat CAT as an exception—no longer holds. Secondary perils are now the driver of year‑to‑year volatility, and they tend to create exactly the types of housing, ALE, and logistics challenges Atlis targets.

Scale Is Growing Faster Than Systems

Sigma makes a key point: insured nat‑cat losses are still rising 5–7% per year in real terms and could reach USD 148B in 2026 and USD 186B by 2030, with peak years modelled as high as USD 320–400B in insured losses. The driver isn’t just “bad weather”—it’s exposure growth: more people, more assets, and more development in high‑risk zones like the wildland–urban interface and floodplains.

For Canada, that’s visible in:

Expansion of communities into fire‑prone areas (beyond just BC and Alberta)
Urban infill and sprawl that makes emergency housing more complex and expensive
Rising rebuild and rental costs, which directly inflate ALE bills and vendor invoices

Swiss Re’s conclusion is blunt: the trend is structural, and even a “mild” loss year is just a favorable draw, not a reduction in underlying risk. That dovetails with Atlis’ thesis that carriers need infrastructure for scale, not one‑off fixes.

Protection Gap Is An Ops Gap Too

The report highlights that only about 49% of 2025’s USD 220B in global economic nat‑cat losses were insured—a record insured share, but still a 51% protection gap. In advanced markets (like Canada), the gap is less about lack of products and more about the affordability and sustainability of coverage as losses and expenses rise.

Swiss Re emphasizes two levers to keep insurance viable:

Better risk modelling and pricing for secondary perils
Investment in adaptation and operational resilience to control loss costs and volatility

Atlis effectively sits in that second bucket. By orchestrating ALE and catastrophe logistics, Atlis attacks the “expense + leakage” side of the equation—making it cheaper and more predictable to actually service the risks that are already underwritten.

Where Atlis Fits: Turning Loss Growth Into Efficiency Gains

The sigma report underlines that secondary perils like wildfires and SCS are growing faster than exposure in places like North America, driven by hazard intensification and asset build‑up in risky areas. That means more frequent, operationally complex CAT events in Canada: multiple mid‑size fires, regional floods, severe storms—each generating thousands of claims and displacing policyholders.

Atlis is built specifically for that environment:

ALE orchestration: Automating housing, storage, and vendor coordination when multiple events hit simultaneously, instead of adjusters managing everything via phone and email.
Leakage control: Reducing the 25% baseline ALE leakage (15% vendor, 5% errors, 5% admin) on an average $18K ALE claim, delivering $2–4K net savings per claim while charging a 6% fee.
Operational resilience: Cutting adjuster time from ~7.5 to ~3.5 hours per ALE claim and centralizing invoicing and documentation, which directly addresses the “operational bottleneck” sigma implies but doesn’t quantify.

In sigma language, Atlis doesn’t change the hazard; it changes the vulnerability and cost structure of the response. That’s exactly where Swiss Re says the industry needs to invest.

Why This Matters For Canadian Carriers Now

Putting sigma and Atlis together for a Canadian audience:

Canada is already experiencing the “secondary peril world” Swiss Re describes: record wildfires, repeat floods, and convective storm losses layered on top of each other.
The global insured loss trend (5–7% annual growth, potential USD 148B in 2026) translates into sustained pressure on Canadian loss ratios and expenses; it’s no longer just about one Fort McMurray‑scale event every decade.
To keep products insurable and affordable, carriers need both better pricing and lower operational drag; Atlis focuses on the latter by making ALE and housing logistics cheaper, faster, and more controlled, while delivering 3–6 month payback and roughly $340K annual savings per adjuster at 100 claims per year.

Sigma is essentially the macro story: secondary perils and exposure growth are locking in higher catastrophe cost baselines worldwide. Atlis is one of the micro answers in the Canadian landscape: turning that structural cost pressure into a controllable, measurable line item rather than an open‑ended drain.

Ready to explore?
Schedule a call.

“Why Manual Coordination Fails During CAT Events”

End-to-End ALE Orchestration

Have questions about this topic or want to discuss what this shift means for your organization?
You can schedule a time to talk with us here.