Canadian commercial lines remain firmly on the soft side, with strong capital and careful underwriting keeping competition intense but contained. Executives and underwriters alike expect that dynamic to continue in 2026, with no sudden swing to a hard market in sight.
Marsh Advisory Canada’s Daniel Kotwinski (pictured left) and Zurich Canada’s Manuel Lewin (pictured right) see a market that is competitive yet measured, where long-term stability is prioritized over short-term gains, and only a surge in claims or a loosening of underwriting standards could meaningfully shift the cycle.
On a soft‑to‑hard market spectrum, both Zurich Canada and Marsh Advisory see Canadian commercial lines firmly on the soft side for now – and likely to stay there further into the year.
“I can mainly comment on commercial lines,” said Kotwinski. “From my perspective, what we have seen is a loosening of the market, and I expect that high level of competition to continue into 2026, based on the indications we’ve received from our partners.”
Despite that competition, he stressed that his team is not chasing price at any cost. The focus needs to be on finding the right partners and “prioritizing long-term stability over chasing right down to the bottom.”
Lewin sees a similar picture from the carrier side. Zurich is largely a commercial player in Canada, and he doesn’t expect a sudden snap‑back to a hard market.
Looking at the underlying drivers – particularly capital flows – he said there have been no real signs of capital exiting. Canada remains “a potentially attractive market” in terms of diversification for global players, and that continues to support a softer market environment. In his words, some of those drivers of the soft conditions “are not necessarily going to go away.”
“I don't think I'd expect it to accelerate or to take another turn down,” Lewin added, “but neither would I expect that we're going to see a shift to a hard market all of a sudden.”
Macro‑economic uncertainty, which they both see elsewhere in the risk landscape, will also colour how the cycle evolves.
Pressed on whether the market might “bottom out” in 2026, Kotwinski called it a difficult question, pointing to economic conditions next year as “one of the biggest pieces” that will shape the answer. But he was clear that one traditional hallmark of late‑cycle soft markets has not yet appeared: a weakening of underwriting standards.
“Historically, a soft market has often come with a loosening of – what I call – underwriting rigor,” he explained. “During those periods, insurance companies tend to focus more on acquiring business rather than on the quality of the risk itself.”
In the current soft market, however, he does not see that pattern.
“Underwriters remain hyper-focused on the quality of the risks coming their way, and they are very attentive to [how clients are] managing those risks,” including setting appropriate limits, deductibles, and improvement requirements.
For him, that underwriting discipline is a key reason the market feels competitive but not unstable. He went so far as to say that maintaining that rigor “gives it additional stability and perhaps the long-term ability to go up,” rather than pushing the market into an unsustainable race to the bottom.
Lewin, wearing his risk officer hat, agreed that the quality of underwriting is a central signal to watch. He described “keeping an eye on the quality of the underwriting… as a key signal,” and said the discipline he sees today reassures him.
“We aren’t seeing a broad loosening of conditions,” he said. “If that were to happen, it would worry me and signal that things are accelerating in the wrong direction.”
When asked what would actually push the market meaningfully softer or back toward hard conditions, both leaders pointed to two broad levers: underwriting behaviour and loss activity.
For Kotwinski, the first sign of further softening would be a visible erosion of underwriting standards. “If I had to point to one key signal, it would be underwriting rigor,” he said. “If we start to see that loosen, then the market could continue to soften further.”
On the other side of the ledger, he said only a surge in loss activity is likely to reverse the cycle. “In my view, the triggers would have to be outpaced loss activity,” he explained. That could include significant supply chain losses, major natural catastrophe events, or other large-scale, systemic events.
He noted that claim volumes are already elevated in some areas.
“If you look at the stats,” he said, “the number of claims in 2024, for example, went up dramatically compared to the 20-year average – 443%.”
That explains why underwriting standards remain tight in key lines despite the broader softening, and why “more activity within those areas will drive more underwriting scrutiny and potentially reduce competition.” In his view, that is the dynamic that “can tip the scales.”
Lewin added the catastrophe lens from the carrier side. He described the recent period as “a very benign cat year,” which “doesn't provide a lot of impetus then to change the trend.” But that can “change in a whim,” he cautioned, and a major event would have “immediate” implications at the negotiating table.
The only other factor he would add is simple history: soft markets often last longer than people expect. He hasn’t gone back to measure the length of past cycles, but suspects the current phase has not yet matched prior soft‑market runs. “One could certainly expect things to maybe last longer than we all hope and expect,” he said.
