Canada’s commercial insurance market is being shaped by a mix of global and domestic forces, from record-setting catastrophe losses and shifting reinsurance dynamics, to persistent operational challenges and the ripple effects of geopolitical uncertainty.
According to Deloitte Canada partners Chris Duvinage (pictured left) and Billy Walsh (pictured right), underwriting and pricing today reflect not only the direct impact of natural disasters and inflationary pressures, but also insurers’ ability to modernize, adapt to supply chain disruption, and pursue growth in a competitive landscape.
Duvinage pointed to last year’s record-setting catastrophe losses in Canada as a key driver of underwriting and pricing dynamics. The country experienced roughly $9 billion in insured losses in 2024, compared with the long-term average of about $3 billion.
“This year has been more moderate so far, with about $1.5 billion in losses through the summer. If the fall storm season passes without major events, 2025 could end closer to a ‘normal’ year”, he said.
Even so, reinsurers remain cautious. With global players absorbing heavy losses in recent years, overall capacity has thinned somewhat. Despite that, Duvinage said he does not expect capacity challenges in Canada’s commercial market. Carriers, he noted, are still actively looking for growth, not retreat.
Walsh emphasized that while appetite for commercial expansion is strong, execution remains a hurdle. Many carriers face operational barriers – from outdated technology and inefficient intake processes to the difficulty of scaling talent and building platforms flexible enough to quickly adapt products.
He noted that these issues are not unique to Canada. Insurers in the UK and US face many of the same constraints, with global carriers often struggling to modernize fast enough to seize opportunities in commercial lines.
Turning to global uncertainties, Duvinage highlighted how geopolitics and supply chain disruption are shaping risk management and pricing. He said that the effects are felt most directly on claims, where delays in procuring materials or higher costs can inflate loss severity.
Trade tensions between Canada and the United States also carry implications. Some smaller or mid-sized businesses could find themselves squeezed if cross-border activity slows, forcing them to rely more heavily on domestic markets.
While that creates pressure for certain insureds, he described the risk as manageable at the industry level, with no expectation that portfolios will collapse as a result.
“I don't think anybody is going to see their current state book of business be much more severely impacted because of the things that are going on right now,” he said.
“Yes, it's a risk that's being monitored, and it’s a risk that's being evaluated on a continuous basis. They're running their analyses, but it's manageable, or it has at least been manageable for now.”
Looking to 2026 and 2027, Walsh pointed to intake efficiency as the most significant opportunity for innovation in Canada’s commercial insurance market. Carriers, he said, still struggle to process submissions and complement them with the data underwriters need to respond quickly and effectively to brokers.
“The big thing that they've always been trying to solve is intake,” he said. “How do they efficiently intake and enrich the files that they receive with enough information to be valuable to underwriters so they can respond to brokers or anyone else with a valid and valuable quote that's in the context of what’s being requested. That whole process remains very dislocated and manual at the moment for almost every carrier in almost every context.”
The problem is especially pronounced in delegated business, MGAs, and program structures. Walsh argued that solving it end-to-end would unlock major gains for the industry, and that AI could accelerate progress by helping carriers “leapfrog” tactical obstacles that have persisted for years.
Unlike in personal lines, where automation often replaces human decision-making, the opportunity in commercial lies in equipping underwriters with better tools. “Here, it doesn’t [remove the manual underwriter],” Walsh said. “It’s all about enabling and empowering the underwriter in a more efficient way, because at the moment, they operate very manually between a lot of different systems, data sources and people.”
For Walsh, the focus is on freeing underwriters from time-consuming processes so they can concentrate on assessing risk and serving clients. “How you can make underwriters’ use of time more efficient and focused on the tasks that matter – that’s where the big focus is,” he said, noting that he and Duvinage have been working with carriers on exactly these kinds of solutions.
They previously told Insurance Business that the Canadian commercial insurance market is easing after several years of firm conditions. 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. Companies with significant cross-border activity, such as transportation firms, face much firmer pricing due to the higher liability environment south of the border. Only a limited number of carriers can manage such exposures, which has kept capacity tight and slowed downward movement in rates compared to domestic risks.
“There's not as much capacity to address those international risks as there is in the rest of the Canadian market,” Duvinage 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 noted.
The sector itself has matured. Carriers are now better able to assess and price cyber risk, drawing on deeper data and a few more years of claims experience. At the same time, clients have become more aware of their own vulnerabilities and the steps they need to take to reduce exposure. A stronger emphasis on prevention has also shifted the dynamic, with insurers requiring robust safeguards as a condition of coverage.
These developments have helped transform cyber from what was once seen as a volatile and immature line of business into one where pricing is stabilizing, even if it has not softened outright. Duvinage added that the shift reflects both market learning and client education: “More data that is available is a part of it, but it’s also about the fact that we have a more educated customer base and about the tools in place that help them defend themselves against the cyber risks,” he said.
