Premium increases across Canada’s commercial insurance sector continued to ease in the second quarter of 2025, according to the latest Applied Commercial Index from Applied Systems.
The industry-wide index showed that average renewal rates rose 3.63% during the quarter, down from 5.83% in the same period last year.
The report noted slower rate growth across most major commercial lines, including Real estate property, business and professional services, and construction. Hospitality and retail services were the only sectors to record increases in renewal rates compared to the previous quarter.
Business and Professional Services saw average renewal rate increases fall to 3.00% in Q2 from 3.99% in Q1. Rates for construction, erection, and installation services dropped to 3.56%, compared to 3.85% in the previous quarter. Real Estate Property renewals averaged a 3.38% increase, down slightly from 3.58%.
In contrast, the hospitality sector recorded a more pronounced rise, with average renewal rate increases rising to 4.53% in Q2 from 3.08% in Q1. Retail services also edged higher to 4.62%, up from 4.57% the previous quarter.
“This quarter’s average premium renewal rate change continues to decrease across the most commonly placed commercial lines of business, except hospitality services which saw a spike,” said Steve Whitelaw, senior vice president and general manager for Canada at Applied Systems. “As we make our way into the second half of the year, the Applied Commercial Index will shine light on how current macro trends such as US tariffs and others will affect rates.”
The Applied Commercial Index tracks renewal rate trends across multiple lines and is used by insurers, brokers, and analysts to monitor market shifts in commercial pricing. The latest data suggests insurers are adjusting rates more cautiously amid evolving economic and geopolitical pressures.
