Canada's commercial insurance market was robust and competitive, giving businesses some of the most favorable renewal pricing seen in the past five years. With multiple insurers competing for accounts in every province, it was an opportune time for organizations to address coverage gaps, increase limits, or explore cost-saving strategies, the Insurance Bureau of Canada (IBC) said.
According to Marsh, commercial insurance renewal rates in Canada declined 4% overall in the second quarter of 2025, marking the ninth consecutive quarter of flat or reduced rates. Commercial property lines recorded the largest decrease at 6%. Marsh noted that even clients with catastrophe exposure or recent claims experienced reductions, as heightened competition pushed rates down.
Meanwhile, Aon's market update pointed to strong underwriting performance, increased capacity, and a growing pool of insurers as factors that created favorable conditions for buyers. Supporting this, MSA Research reported that more than 100 commercial insurers operated in Canada, representing a 10% increase since 2018.
The IBC advised businesses to take advantage of these conditions not only to secure savings, but also to strengthen risk management practices. Strategies included comparing quotes across multiple providers, consolidating policies to qualify for multi-line discounts, increasing deductibles, or locking in favorable rates with multi-year terms.
Accurate replacement cost appraisals remain critical to avoiding underinsurance, the bureau said. Business owners are encouraged to account for variables such as material and labor costs, debris removal, compliance with bylaws, and heritage-related expenses. Maintaining robust fire protection, security systems, and employee training also helped businesses stand out as “best in class,” making them more attractive to insurers and positioning them for broader coverage at lower premiums.
While pricing conditions are favorable, risk management remained central. Businesses that demonstrated strong controls and a clean claims record were best placed to leverage the market cycle.
Industry observers cautioned, however, that soft markets did not last indefinitely. Past cycles showed how quickly conditions could turn. After the Fort McMurray wildfires in 2016, property insurance rates hardened sharply in Alberta as claims costs mounted.
Similarly, the global financial crisis of 2008–2009 triggered capacity constraints that tightened pricing across commercial lines. More recently, the pandemic years saw a correction as insurers responded to business interruption disputes, cyber losses, and higher reinsurance costs. For that period, competition kept rates low, but businesses were encouraged to act promptly to lock in favorable terms before the cycle shifted.
According to the IBC, commercial insurance helped Canadian businesses balance risk with opportunity, allowing them to focus on growth, job creation and serving customers, even in an unpredictable environment.
