Canada’s environmental insurance market is still firmly in soft territory, but the pace of rate cuts appears to be slowing, and a few pockets of hardening are starting to emerge.
Brian Ashton (pictured), senior underwriter for security and pollution at SWG, said the sector has been easing since the pandemic and has yet to meaningfully turn.
“The short answer is, it’s still very soft,” he said. “I think it’s been soft since probably 2023 or so, and I’d say it’s continuing to be like that.”
He described 2026 as looking much like 2025, with most classes still profitable overall. Environmental losses, he noted, can take about five years to fully develop, which makes it harder for carriers to judge when they have truly underpriced the business.
“Environmental claims take an average of five years to fully develop,” Ashton said. “So the final cost isn’t really known until long after the policy is written and the claims have fully developed.”
From a broking perspective, that long claims tail means current pricing still reflects comparatively benign loss years, Ashton suggested, even as underwriters are conscious that deterioration can surface late. He said most of the competitive pressure is focused on straightforward, day‑to‑day risks, where capacity remains plentiful and underwriting models are well established. More complex or higher‑hazard occupancies are seeing greater scrutiny on information quality, site history and operational controls, but he does not yet see a consistent market-wide push to reprice those risks in a materially harder way.
Conditions vary by line. On premises environmental liability, Ashton said the market has been more challenging than for some other products, particularly as attention builds around “forever chemicals” and other complex contaminants. Even so, he said, capital remains readily available for well-managed risks.
“Everyone likes to talk about PFAS and other chemicals,” he said. “But even when there’s an inherent risk there, markets are still open to them as long as it’s well managed.”
Contractors' pollution liability is even softer, in his view. Capacity is abundant and insurers are broadening coverage without always charging for it.
“For contractors' pollution, this is probably the softer market,” he said. “Coverages that insurers used to carefully underwrite and charge for, such as Non-Owned Disposal Sites (NODS), Transported Cargo, and Crisis Management Coverage, are now just being added with no additional charge and not much underwriting.”
Ashton pointed to non-owned disposal sites, transported cargo and crisis management extensions as examples of add-ons that are increasingly being bundled in, even for higher-risk accounts such as civil contractors.
The storage tank business has been comparatively stable. Minimum premiums, he said, have likely reached a floor, at least for now.
“To be honest, I don’t see minimum premiums getting much lower than they already are,” Ashton said. “I feel like they can’t really get much lower.”
The key differentiator for underground storage tanks is age and construction. Best-in-class double-walled fibreglass tanks, with automatic tank gauging and interstitial monitoring, are commonly used at regulated sites such as gas stations. Within their expected 20‑ to 40‑year life span, insurers are generally comfortable.
“If it’s less than 20 years old, you’re not going to get a lot of pushback or requirements for testing,” he said.
That changes as assets approach the upper end of their life. Once tanks reach 30 to 35 years, Ashton said, testing demands increase and pricing firms up sharply.
“Once they start getting to that 30, 35‑year‑old range, it does start to harden a lot,” he said. “More testing requirements to make sure the tanks are sound and premiums do start to go up a lot.”
Above-ground tanks are treated more leniently, with some markets willing to consider assets up to 50 years old, though Ashton said he has yet to see one that old come across his desk.
Outside the ageing-tank issue and certain higher-hazard premises risks, he sees little evidence of a broad turn in the market. Some carriers, including SWG, are securing modest rate improvements on specific portfolios such as CPL and tanks, but day-to-day, less complex business remains highly competitive.
“I’ve heard some people say that rates are going to go down 5%, I’ve heard some people say they’re going to go up 5% to 15%,” Ashton said. “I think the products are still very profitable, so the market should remain soft.”
