As insurance industry followers had initially predicted in December 2025, the overall global treaty reinsurance renewal negotiations on January 1, 2026, yielded favourable terms, with lower reinsurance costs for primary insurers ultimately benefiting the policy holders. There were key items, such as extreme weather and climate risks, including unpredictable wildfires; geopolitical and trade instability causing disruption in supply chains; and higher costs to source critical parts for manufacturing companies, which were inherently discussed. However, these issues did not materially affect the outcome of the negotiations, as available reinsurance capacity was estimated to be over USD760B as of year-end 2025. The reported insured losses stemming from global natural catastrophic activities (such as earthquakes, flooding, windstorms, and hurricanes) in 2025 were 10% below the ten-year average.
In addition to the stable treaty reinsurance capacity, the insurance markets have also seen the impacts of a new wave ofcapitalfrom private creditindustries,which further enhances healthy competition to risk transfer markets.
With fluctuated interest rates impacting returns on investments, the loss ratios remain good. The uncertainty of volatile threats of US tariffs creates a constant concern for companies in Canada that transact business in the US or rest of the world.
Insurers will remain disciplined with their approach to underwriting tougher class with higher deductibles, restricted terms, and geographic limitations for assets located in high-risk areas.
Canadian insurers will continue to pursue their respective growth strategies throughout 2026, a continuation of the trend from 2025.
In addition, there have been a few acquisitions in Q1 of 2026 in Canada, such as Definity purchasing Travelers Canada, and the most recent announcment of Wawanesa acquiring Everest Canada, with these buyers primarily focusing on overall growth, capturing greater market share, and strategically expanding in coverage lines that may not have existed in their books.
There will once again be a noticeable shift this year where insurers seek opportunities that may have not been considered in the past, and many companies are investing more in Artificial Intelligence and digitalization to help reduce overhead costs and redundancies and achieve operational efficiencies in data collection in underwriting and claims reporting processes.
Property
Subject to Good Loss History: non-Cat: -5% to -15% Cat: flat to +10%
In 2025, there were significant natural catastrophic property losses in Canada, including:
Ontario and Quebec Ice storms yielded $342M of insured losses
Manitoba and Saskatchewan Wildfires yielded $300M of insured losses
Newfoundland and Labrador Wildfires yielded $70M of insured losses
Despite that 2025 was the second worst wildfire season with over 7.25 million hectares of land being affected, the Canadian property insurance landscape completed 2025 with a positive outlook, primarily driven by the influx of available property capacity from domestic and global markets.
In Q1 and Q2 2026, property capacity remains healthy and stable in Canada, resulting in Insureds experiencing rate reductions, but at a declining pace. Insureds who had experienced significant doubledigit rate decreases (at times beyond industry trends) over the past two years, from their incumbent markets, may not see the same level of percentage rate decrease at renewal, as underwriters are focusing on sustainability in pricing. However, many insurers are motivated to deploy their capacity on good performing risks, which can lead into aggressive pricing competition. Underwriters will focus on the following pertinent underwriting data:
• Rising replacement costs
• Business Interruption reporting and adequacies
• Accurate location data
• Business Continuity Plans, including robust supply chain requirements
• CAT Modelling
• Quality Engineering Data
Key considerations in 2026:
• Underwriting discipline is maintained on more restrictive terms, coverages, and deductibles, as well as aggregation practices.
• Loss control inspections and completing recommendations will remain important criteria.
• Ensuring rates are sustainable for the long-term unknown claims activities.
• Ongoing and regular engagements with clients are key for successful long-term partnerships.
Commercial General Liability
Subject to Good Loss History: -5% to -15%
Competition in the Canadian casualty insurance marketplace remains healthy in Q1 and Q2 2026. Insurers are actively pursuing new business opportunities for growth and diversification. Insureds will continue to experience rate reductions, at a modest pace, where they may have seen significant double-digit rate decreases (at times beyond industry trends) over the past two years, from their incumbent markets. This year, insurance companies will continue to underwrite each risk on its own merits, to ensure sustainability in their pricing. However, competition will continue to contribute to rates falling below industry trends in 2026.
Underwriters will remain cautious to emerging exposures such as the use of per- and polyfluoroalkyl substances (PFAS). Many insurers are automatically imposing this mandatory exclusion, relying on the reverse burden language stating that Insured must prove the contrary that reported claim was not caused by PFAS, as seen on Construction policies from the London markets.
Nuclear verdicts, social inflation, climate change, ESG, impact of US tariffs, as well as rising defence costs and higher claims settlement, are key factors when underwriting Canadian risks, especially for those clients who have operations in the US.
Underwriters will continue to focus on the following key considerations in 2026:
• Insureds’ risk control measures and procedures are required, such as Quality Control measures and Employee Health & Safety plans.
• Receipt of quality underwriting data, including estimated revenues breakdown by regions.
• Ensuring rates are sustainable for the long-term unknown claims activities.
• Ongoing and regular engagements with clients are key for successful long-term partnerships.
Canadian Automobile Liability
Subject to Good Loss History: -5% to flat
The fleet insurance market in Q1 2026 continued to see flat to nominal (less than 5%) rate changes for well-performing risks. Abundant capacity remains for the primary automobile liability and excess/umbrella placements, including fleets with high US exposures. Select underwriters are still open to reviewing and offering multiyear guaranteed renewal options and profit-sharing programs. Telematic products will be piloted and rolled out with upfront premium savings when fleets choose to share their on-road driving behaviour data. All signs point to a continued positive outlook for the remainder of Q2 into Q3 2026.
The Ontario Auto reform which takes effect on July 1, 2026, will allow policyholders to opt out of certain key Accident Coverages. Medical, rehabilitation, and attendant care benefits will remain automatically part of these policies, while the remaining other accident benefits coverage, including but not limited to, Income Replacement, Caregiver, Housekeeping/Home Maintenance, Dependent Care, and Death and Funeral, will be optional, allowing Insureds more flexibility and potential costs savings.
Following the Bay County, Florida, crash in August 2025, the resulting nationwide crackdown in the US transportation sector is now influencing how Canadian trucking companies operate, accelerating the push for fully compliant carriers and driver practices. As these regulatory pressures grow, drivercapacity challenges are re-emerging across Canadian provinces.
The Provincial Trucking Associations are looking to:
• Ensure driver licence fraud within commercial truck driver licensing is eliminated.
• Labour compliance checks start to ramp up, as all Crown corporations and government projects that tender contracts for trucking services need to ensure drivers are not being misclassified and meeting their tax and labour obligations.
• Review the Facility Association for commercial trucking and make necessary corrections to cleanup fleets, so they can exit the Facility pool into a traditional insurance pool after 1–2 years.
Umbrella Liability
Subject to Good Loss History: -5% to +5%
With the rise in the number and quantum paid out in nuclear verdicts, including class action lawsuits, and some significant automobile losses breaching into the umbrella layers, especially in the US, many carriers will remain conservative in their pricing. However, with additional excess liability capacity available, umbrella liability markets will seek sustainable and reasonable rate changes and premium requirements, while being mindful of aggressive underwriting competition.
Umbrella carriers are insisting on a minimum attachment point of $5 million for US Automobile and $1/$2 million for Canadian Automobile.
Excess Liability
Subject to Good Loss History: Flat
Excess liability capacity remains very healthy in Canada from domestic carriers expanding their available limits and appetite and from continued ongoing keen interest from global markets, such as London and Bermuda, which remain attracted to Canadian risks. Underwriters are deploying their capacity as the premiums for these layers have been corrected over the past several years, creating a more sustainable pricing per million for favourable and higher considered risks.
Executive Risks Liability
Generally favourable current market conditions:
• Premium stability despite economic and geopolitical turbulence Canadian Executive Risk insurers remain sufficiently profitable to sustain further decreases in profit margins, although more selectively than in recent years, despite unfavourably trending key economic indicators. Focus is nevertheless expected to progressively shift away from pure premium volume growth toward portfolio balance and diversification (business-mix, primary vs. excess, sector, multi-line hedging).
• Abundant capacity and steady competition Average price points remain at levels that allow for abundant capacity and a competitive market.
• Noticeable tightening of underwriting in sectors/businesses heavily exposed to tariffs, exchange rates, international trade, and economic pressure Typical risk management mechanisms/ramifications include limit management, increased retention and premium, more rigorous path to get CCAA filings accepted as NOPCs, increased run-off costs, policy extensions vs renewals, lengthier renewal process, etc
Outlook & Trends by Product Line
Crime Trend: + Improving
• Abundant capacity.
• Generally low claim frequency.
• Social Engineering Fraud capacity increasing, but insurers are still being cautious:
• Limits management
• Cautious underwriting of controls
• Conditions precedent increasingly prevalent
Fiduciary Liability Trend: = Stable
• Uptick in excessive fees litigation.
• DB funding/solvency scrutiny.
• Close monitoring of plan alterations and costs (health benefits).
Trend: - Deteriorating
• Increased concern over down cycle and workforce reductions.
• Increasing claims frequency:
• Wrongful termination
• Insufficient notice
• M&A restructuring/ earnouts
Trend: = Stable
• Abundant capacity.
• Increasing underwriting scrutiny over:
• Leverage in a context of high interest rate
• Anticipation of reduced consumer spending in retail, travel, and entertainment
• Access to financing
• Impact of tariffs
EPLI
D&O
Cyber Liability
Cyber remains a buyer-friendly class in Canada and in the London market. The pace of rate decreases, however, has slowed, and 2026 renewal conversations will be more technical. Capacity is still abundant, especially on excess layers, coverage remains broadly negotiable for well-controlled risks, and insurers continue to compete for quality business. That said, ransomware, vendor/system failure, privacy noncompliance, AI-enabled fraud, and systemic cloud concentration are keeping underwriting discipline intact. The practical message for brokers in 2026 is: favourable conditions will still exist, but this will be no longer a carefree, soft market.
2026 is the maturing soft market year.
Topic Q3/Q4 2025
Pricing
Strong rate reductions and broadening coverage
Threats Ransomware dominant; AI emerging
2026 update
Still soft, but reductions are slowing; renewal to be expected as is (some regions/programs are flattening) and tougher negotiations are emerging for poor performers or loss-affected accounts
Ransomware remains dominant, but AI-enabled phishing/BEC, vendor dependency, privacy exposures, and system failure are now more central in underwriting and coverage discussions.
Regulation General cyber resilience trend
Market Conditions and Pricing Trends
In 2026, Canada, the EU, and London will be exerting more practical pressure through incident reporting, resilience, and wording governance; this increasingly will affect underwriting questionnaires and policy drafting.
Results of 2025: Canada remains competitive, with cyber rates in Canada decreasing 10 to 15% overall, driven by broader coverage, negotiable retentions, and strong excess competition; favourable conditions in Canada for quality risks. For 2026, the consensus is not a hard market, but a maturing soft market with stabilization or selective tightening rather than continued steep reductions everywhere. Practical implication: strong insureds can still seek higher limits, lower retentions, broader wording, improved cybercrime treatment, and better system-failure outcomes, but insurers are less willing to concede aggressively where controls, sector profile, or claims history are weak.
Upcoming Canadian Market Changes for 2026
A new source of positive market uncertainty in 2026 relates to Zurich accelerating cyber strategy following two major transactions:
• The acquisition of BOXX Insurance, a cyber insurance and cyber-protection platform focused on SMEs
• The announced acquisition of Beazley, one of the world’s largest cyber insurers and a leading Lloyd’s specialty underwriter
While Zurich lost 20% of cyber market share in 2025 in Canada, these acquisitions suggest Zurich is building one of the most vertically integrated cyber insurance platforms globally, combining:
• Cyber Insurance capacity
• Cyber risk services and prevention
• Technology-driven distribution
• SME digital cyber products
The combined Zurich-Beazley-BOXX ecosystem could increase competitive pressure on cyber insurers that rely solely on traditional underwriting models. It may accelerate the evolution of cyber insurance toward integrated cyber-risk management platforms combining insurance, technology, and prevention services.
Another development expected to influence the Canadian cyber insurance market in 2026 is the expansion of Resilience Cyber Insurance Solutions in Quebec, supported by a strategic partnership with Intact.
Resilience operates a cyber risk management platform that combines insurance underwriting with continuous combined cybersecurity monitoring and analytics. In Canada, the company is expected to work in collaboration with Intact, which provides local market presence, distribution reach, and regulatory infrastructure.
Similar to Zurich positioning, the Intact-Resilience partnership illustrates a broader shift in the cyber insurance industry toward integrated cyber protection ecosystems, where insurers combine insurance capacity with cybersecurity services, data-driven risk analytics and automated online platforms. These trends resonate with BFL CANADA strategy with the digitalization of its cyber products for 2026 through SPD&I and BFL Digital.
Environmental Liability
Flat to modestly increasing premiums Environmental liability faces similar pressures from rising loss costs and social inflation as other lines of business. However, due to abundant capacity in the market, volatility remains low for performing accounts across all environmental lines. Rate increases, when present, are most notable in the premises pollution segment and remain modest. Even accounts with higher losses are attracting market interest. Rate reductions are common for desirable accounts, and the market is especially soft for contractors’ pollution liability. Certain pockets of market hardness persistforhigher-hazard businessesinthe oiland gasandminingsectors,aswell asforcoverage related to contaminated site development and transactions exposures. Insurers with underwriters in London or the US are aggressively seeking to expand their presence in Canada.
Book management—Minor appetite adjustments have continued. PFAS exclusions on premises pollution accounts are generally applied on a case-by-case basis, and more commonly seen with industrial exposures. These exclusions can sometimes be avoided by providing PFAS-related underwriting information. Residential mould exposures are also under scrutiny, especially for residential premises pollution. However, on the contracting side, carriers have become increasingly willing to offer occurrence-based mould coverage for residential exposures, including wood frame.
Aggressive production budgets in a slowing economy As of March 2026, underwriter budgets remain in growth mode with an economy that is facing headwinds and increasing market competition. Underwriters are aggressively pursuing new business and defending their renewals. Underwriters continue to experience fatigue as they are pressured on renewals and still see a steady flow of new business opportunities, driven by marketing efforts in a soft market.
Outlook & Trends by Product Line
• Flat to modest rate increases for standard risks; decreases available when pressured by other markets.
• Abundant capacity for most classes of risk, except for mining, oil and gas production, and large real estate schedules with large engineering requirements.
• PFAS restrictions are common, but approach has softened overall.
• London- and US-based underwriters are trying to expand their Canadian presence.
• Five-year terms are re-emerging for some operational risks, sometimes offered voluntarily by insurers to win business.
• Flat to decreasing rates overall.
• Abundant capacity and strong competition for most classes of risk.
• Market appetite is expanding for occurrence coverage for residential mould exposure.
• London- and US-based underwriters are trying to expand their Canadian presences with contractor’s pollution, although the domestic market remains very strong.
• Multiyear options for CPL practice policies remain an opportunity for premium savings.
• Modest rate increases overall, with larger increases on umbrella layers with US auto exposure.
• Stable capacity, with new entrants who are looking at expanding their presence in Canada. However, the product remains underutilized.
• PFAS exclusions remain standard.
• Modest rate increases, driven by GL and E&O exposures
• Stable capacity. Some new entrants have emerged and are exploring CPL/E&O combined forms with unique E&O appetites that go beyond environmental services.
In Summary
With anticipated early indications in 2026 that abundant available reinsurance capacity and private capital remain strong, the Canadian commercial insurance market landscape will continue to experience favourable renewal terms for Insureds with attractive loss history as we enter Q2, albeit with rate reductions at a slowing pace.
Insurers will maintain underwriting discipline to include careful review of full and detailed required pertinent data. Competition will be aggressive for incumbent markets protecting their existing book from carriers whose growth targets remain a priority.
Key focus for insurance companies is Sustainability to ensure profitability.With pastconsecutive yearsofquoting significant rate reductions to protect their existing book of business and with new carriers expanding their appetites and creating aggressive pricing competition, many underwriters are seeking other methods to “win” business.
Building strong relationships with clients is critical for longterm strategic commitments for every insurance company in Canada. Outside of competitive pricing, some of the main successes to ensure strategic partnerships with clients include: regular face-to-face stewardship meetings during the policy terms; seamlessly working with Insureds who are facing ongoing climate, geopolitical, and trade-related issues; offering additional risk control and related industry expert services; demonstrating strong claims advocacy; offering multi-year rate guarantees agreements or Contingent Profit Sharing Agreements; and considering amending restrictions on policies in favour of the Insureds.
At this time, the outlook for Canadian insurance market conditions in 2026 remains healthy, as we may see other possible acquisitions of insurance companies Industry experts will continuously be watchful, as insurance conditions can change immediately as wildfire season begins. Other factors include the unpredictable hurricane activities, other unforeseen global CAT events, and the instability of the geopolitical crises, in particular in the Middle East.
