As competitive pressure builds across Canada’s commercial insurance landscape, Definity is recalibrating where and how it grows heading into 2026. According to Obaid Rahman (pictured), senior vice-president and chief underwriting officer for commercial insurance, the company is shifting its mix of business – not by pulling out of segments, but by refusing to chase pricing that no longer aligns with underlying risk fundamentals.
Rahman said the shift is being driven by a market transition that began in 2024, after several years of unusually strong margins.
“From 2019 up until 2024 the commercial insurance market was very firm in terms of pricing,” he said. “Growth was double-digit. Rate was high single-digit. And some of it was correcting areas where pricing was weak from the past. So, it was getting them to the right profitability.”
But external forces were influencing the cycle as well. The post-pandemic supply chain shock pushed inflation higher, yet it also had the effect of strengthening commercial insurance profitability. By 2024, industry margins were broadly robust across most carriers, he said.
By early 2024, the strong margins across the industry created a natural expectation that the commercial market would start to ease. Competition began to increase as carriers sought to expand market share, and that softening trend has continued steadily over the past four or five quarters. As Rahman put it, “It hasn’t been slowing down.”
That pullback, however, hasn’t been uniform across the commercial spectrum.
“It is quite skewed – not everything is getting impacted at the same time,” Rahman said.
“The majority of small business and mid-size business is still getting pricing which is ahead of inflation. So, conditions are fairly stable. But in many larger accounts, segments such as real estate, realty, or bigger programs, it’s been very competitive.”
In those large-account segments, he said pricing has now diverged significantly from risk fundamentals.
“That part of the market has now separated itself, where it’s no longer connected to the fundamentals of what we would expect pricing to be in those segments,” he said. “What that means is you’re not collecting enough premium to truly, truly fund losses on these over the longer term… So it’s disconnected a bit from the fundamentals of what you would want in pricing.”
Unlike some carriers that may tighten appetite or retreat from unprofitable classes, Rahman said Definity’s approach is consistent: quote broadly, but refuse to follow price deterioration.
“We are remaining very disciplined on that part of the market. We are not trying to chase pricing down,” he said. “We don’t believe margins are there, and our mix of business is shifting because of that.”
When asked whether this meant pulling back from certain areas, Rahman was explicit:
“You just aren’t chasing growth,” he said. “You’re not following pricing which does not align to what you think appropriate pricing for that risk would be.”
He stressed that Definity is not exiting classes or declining to participate.
“It’s not that we’re exiting. We will always quote a business within our appetite. We will always move forward to say we want to write the business – we write all business within our risk appetite, everything that comes in,” he said. “We will quote everything within our appetite. We’re simply not going down the path of saying we will chase this price if we believe that price… is not technically sound, does not meet our margin requirements.”
The consequence in a competitive market is straightforward:
“We don’t win as much, which we’re okay with,” he said. “Because it’s important for us to stay disciplined, because our value proposition to brokers, to the market, is that you get stability with us through the cycle.”
Following the cycle downward only to raise rates sharply later is not the experience Definity wants to deliver, he added.
“We don’t try and follow the cycle that way, because then you get volatility – pricing going down, and then you go up next year. That’s not the value proposition we’re putting out to our brokers and customers.”
This disciplined stance is reshaping Definity’s book heading into 2026.
“Our mix of business is shifting because of that,” Rahman said. “We are growing in the smaller, mid-size business where things are stable. We’re not getting as much growth on the larger, upper-middle market and some of those segments where it’s very competitive. But we’re okay with that through this part of the cycle, and let me remind you that we are still growing at more than double the industry rate given our overall value proposition.”
For Rahman, the priority is maintaining underwriting integrity in a market where fundamentals have become blurred in certain segments.
“It is, in our view, the right approach to move through this type of cycle in a disciplined way,” he said.
