Trend forecasting in this current climate is challenging due to global and national trade policy shifts that are occurring almost daily. However, there are a number of indicators that Équité Association is watching closely, including economic decline due to increased unemployment and cost of living, international implications of tariffs and trade policies, as well as catastrophic climate events.

During periods of recession, we see key indicators that are associated with increasing crime, including insurance crime. From a property and casualty (P&C) insurance lens, Équité is keeping an eye on emerging trends, particularity in both auto and property crimes. As the cost of living and unemployment rise, we can expect to see more insurance crime.

Re-VINs & Chop Shops

Similar to the supply and demand issues relating to vehicles during COVID, which drove more organized crime groups into committing vehicle crimes, it is reasonable to believe that the same effect may result with supply issues from tariffs. Crimes may include an increase in chop shops and re-VINing. According to Équité’s 2024 Auto Theft Trend Report, 40% of stolen vehicles are not recovered. Recovery rates are lowest in Ontario (50.8%) and Quebec (43.6%). These vehicles are likely being re-VINed then sold to the public, or sold for parts at illegal chop shops.

Tariff Implications

With targeted tariffs on steel and aluminum, we anticipate a rise in theft for automobile parts, and particularly, their illegal export across the border. Tariffs are likely to have varying effects regionally, for example, Ontario has a deeply integrated North American supply chain, particularly in the auto sector. In April and May, media have reported on permanent and temporary auto manufacturing related layoffs in Windsor and Oshawa as plants pause or scale back production, linked to tariffs. Almost 40,000 jobs are tied to the aluminum industry in Quebec. As a result, Équité is closely watching for spikes in auto and property insurance crimes in these provinces.

Catastrophic Climate Events

Global and national political events are not happening in a vacuum. Compounding crime associated with economic decline, natural catastrophic weather events may also create opportunities for criminals to hide fraudulent activities in the high numbers of annual flood events and the wildfire season. These frauds have real and devastating consequences for individuals during a very vulnerable time. Fraudsters posing as contractors will typically target those with the most severe property damage, expecting to take advantage of higher claims opportunities. They will rely on panic, stress, and urgency to pressure individuals into signing contracts without fully explaining cost or scope. Typically, these criminals will do their best to drain a policyholders policy limit with no intention of providing adequate services, victimizing Canadians twice: once by the CAT event and again by the criminals they trusted to help them.

How Équité is Meeting the Moment

Équité offers our members the advantage of aggregated data, including fraud data modeling and enhanced reporting, complemented by the hands-on expertise of seasoned investigators. We also bring together the collective expertise of the Canadian P&C insurance industry to identify insurance crime in order to help create safer communities for honest, hardworking Canadians. Équité’s products and services are designed to respond to the rapidly growing problem of insurance crime, while recognizing the unique requirements of each of our members.

By joining together, our members are part of a leading national response in combating insurance crime and disrupting organized crime. Together, we can create safer and more equitable communities.

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