The Canadian commercial insurance market is easing after several years of firm conditions, according to Chris Duvinage (pictured left), partner and P&C insurance segment leader at Deloitte Canada, and Billy Walsh (pictured right), partner and commercial insurance technology lead, technology and transformation.
While the trend is not uniform across all lines, they said many clients are seeing stabilization – particularly in cyber – as carriers gain confidence in underwriting risk and policyholders adopt stronger prevention tools. At the same time, certain exposures, especially those tied to US operations, remain resistant to softening.
Duvinage noted that, broadly speaking, market conditions are softening across Canada, though not every product or line is moving in the same direction. Companies with significant exposure to the United States stand out as exceptions.
For example, Canadian firms with cross-border transportation operations continue to face firm pricing because of the much higher liability environment south of the border.
Only a limited pool of carriers can effectively handle these international exposures, which has kept capacity tight and slowed any downward movement in rates compared to domestic risks, Duvinage added.
“There's not as much capacity to address those international risks as there is in the rest of the Canadian market,” he said.
Cyber insurance is another area that behaves differently from the broader market. Rates are not falling, but the rapid double-digit increases of recent years have moderated, Duvinage said.
The sector has matured, with carriers better able to assess and price cyber risk and clients more aware of their own vulnerabilities. A stronger emphasis on prevention has also played a role, with insurers requiring robust safeguards as a condition of coverage, he added.
These developments have helped shift cyber from a volatile, immature line of business into one where pricing has stabilized, even if it has not softened outright.
“More data is available and that is a part of it, but it’s also that we have a more educated customer base and about the tools in place that help them defend themselves against cyber risks,” he said.
Walsh observed that many carriers in Canada remain eager to expand their commercial operations, even as broader economic conditions present headwinds. In particular, mid-market and specialty lines have become areas of focus. Large insurers that were traditionally concentrated on personal lines or very small commercial accounts are now investing in growing their presence further up the ladder.
“They see a good margin there, so that is an opportunity,” Walsh said.
This appetite is driving competition, as carriers seek to capture new segments and add capacity in markets they previously overlooked.
Duvinage added that established carriers are also showing more flexibility than they did just a few years ago. Risks that might once have been avoided are now being reconsidered as insurers look for ways to meet ambitious growth targets. With competition intensifying, carriers are weighing how best to expand: either by taking on a broader range of risks or by easing on rate demands.
This doesn’t mean insurers are abandoning the pursuit of rate increases altogether. Instead, they are balancing growth with the need to retain existing clients and maintain profitability, he said.
“Carriers are still asking for rate increases, but they’ve got to make sure they balance that very carefully with retention of the existing book,” he said.
Walsh noted, however, that seizing these opportunities depends heavily on carriers’ ability to modernize their operations. The challenge is not just about appetite for growth but about execution. To move quickly into new segments, carriers need to roll out products that are simple, compelling for brokers, and accessible to clients.
Too often, progress is constrained by outdated technology systems, rigid product structures, or legacy processes that slow innovation.
He emphasized that while MGAs and smaller players are often more agile, large carriers still grapple with obstacles such as intake inefficiencies, outdated tech stacks, and ingrained mindsets around product development. Overcoming these hurdles, Walsh said, will be critical if insurers are to translate their appetite for growth into sustainable expansion in the commercial market.
Asked whether today’s softer conditions and heightened competition suggest that carriers are chasing a larger share of a shrinking pie, Duvinage pushed back on the idea. He said the better description is that insurers are competing for a larger share of a market whose growth has slowed down.
“I wouldn’t say ‘shrinking pie’, but they are competing for a larger share of a ‘slower-growing pie,” he said.
From his perspective, the overall commercial insurance market is not contracting. Revenues are still rising, supported by both rate momentum and modest unit growth. Some lines are expanding faster than others, but, on average, commercial business in Canada continues to grow.
While certain segments may face compression, Duvinage stressed that the industry as a whole remains profitable, with carriers continuing to allocate capacity and investment into commercial. Unlike the pullback seen a decade ago, when capacity was withdrawn from the sector, today’s players still view commercial lines as a strong opportunity.
“The insurance industry overall believes there's still a lot of money to be made. That's why you're still seeing other carriers commit more and more capacity and investment in the commercial space,” he said.
