The Canadian crime and employee theft insurance market remains firmly in the buyer’s territory, despite loss trends that might suggest it should be tightening, according to Philippe Côté (pictured), senior vice-president and national practice leader, executive risks at BFL Canada.
“I think the crime market has been soft for the longest time,” he said. “If you look at the claims trending, I think there is an argument to be made that it should be hardening, but it’s not.”
Côté said pricing and terms still reflect abundant capacity and relatively modest limits, rather than the deterioration many brokers are seeing in claims. In practical terms, that means competition remains intense and insureds can often secure broad cover at comparatively low cost.
“I would say it’s very much still a buyer’s market,” he said. “Relatively low limits, relatively inexpensive, and, by and large, you’re looking at a product line characterised by a relatively high frequency of low-severity claims. This is probably why the market remains soft.”
Part of the explanation lies in how crime coverage is positioned within commercial programs. It is rarely the focal point of a placement and is not usually the line that drives overall negotiations.
Côté noted that very few clients call their broker specifically asking for crime insurance.
Instead, crime is most often sold alongside other executive‑risk lines, or used by carriers and brokers as an account‑rounding tool.
“It’s typically a product that’s sold in parallel to, say, a D&O policy or an employment practices liability policy,” he said. “So I guess it’s just… usually something that carriers see as a quick cross-sell win. It’s an easy write.”
Many insureds also carry small crime sublimits built into their commercial property and casualty packages – for example, $25,000 or $50,000 embedded in a multiperil policy. Those low‑level extensions are often priced into the overall package premium and may be sold direct or via brokers, reinforcing the perception that crime is a secondary, almost incidental, line, he added.
From an underwriting perspective, those features make crime relatively attractive. Limits are modest, premiums are small, and even when claims do occur, they are more likely to erode a line item than jeopardise a portfolio.
“You’re probably not seeing the big, ‘OK, if we overextend here, or if we completely misalign in terms of price or retention, it’ll blow our entire book,’” he said. “I don’t think it’s a product that’s not been profitable for insurers.”
That profitability, combined with intense competition and the perception of low volatility, helps explain why carriers have been reluctant to push aggressively for higher rates or narrower terms, even as social‑engineering and internal fraud claims increase.
“It all together makes for a strong argument to just keep writing it the way they’ve been writing it forever,” Côté said – quickly, at a price point most clients will accept “without thinking about it.”
None of this means the line is static. Côté acknowledged that both frequency and severity have been “trending up,” particularly for social‑engineering fraud and vendor‑impersonation losses. Underwriters are paying closer attention to wording in those areas, tightening callback requirements or distinguishing more clearly between different impersonation scenarios.
But he does not yet see the kind of coordinated retrenchment that has reshaped other specialty markets such as cyber, D&O or property CAT.
“If you look at how carriers report this in terms of take‑up and percentage of their clients that buy it, I’m pretty sure they look at it from whoever buys standalone, as opposed to a sublimit on a P&C policy,” he said. “So a lot of what’s actually out there probably doesn’t even show up in those numbers.”
For brokers, the current environment presents both opportunity and risk.
On the one hand, the softness allows intermediaries to secure stronger standalone crime programs – with higher limits, tailored social‑engineering extensions and better negotiated retentions – for clients whose exposure warrants it. On the other, the ease with which crime can be bolted onto broader programs increases the temptation to treat it as a low‑attention checkbox.
Côté suggested that the real work now lies less in pushing price and more in reframing how clients think about their exposure.
He pointed out that many small and mid‑sized businesses look at a $25,000 or $50,000 sublimit and assume that is more than enough to catch “a bit of dishonesty” before it snowballs, without fully appreciating how long schemes can run undetected or how policies aggregate losses from repeated acts.
Against that backdrop, brokers who treat crime as a serious line of business – asking detailed questions about controls, segregation of duties, payment processes and vendor management – can differentiate themselves, even while the market remains generous on terms.
For now, though, headline conditions remain favourable to buyers.
“Long and short of it is, I would say it’s still pretty soft,” Côté said.
