Market capacity is ample in Canada, such that consulting firm WTW is encouraging commercial lines insureds to leverage current competitive conditions to obtain improved ratings and enhanced terms.
The report, Insurance Marketplaces Realities Spring Update 2025 also encourages these clients to be vigilant about the changes in their exposures due to economic uncertainty. Insurers themselves, meanwhile, are focused on catastrophe exposures.
The extensive global report includes rate predictions for both Canadian casualty and commercial property lines. For casualty, they say the Canadian insurance market is expected to experience prolonged stability and manageable pricing. Property rates, meanwhile, are expected to stabilize in 2025, “with ample capacity from both new-entrant and incumbent markets driving rates downward,” they write. “Top-line growth has been the key message from insurers throughout Q1 2025. These conditions exist despite 2024 experiencing the largest amount of insured natural catastrophe losses (circa CAD $8.5-billion) in Canada.”
In general liability, they say carriers are increasingly concerned about foreign exposure risks, particularly from the United States. Carriers are encouraged to anticipate how tariffs impact future claims settlements and associated costs.
Automobile liability, meanwhile, remains core to overall Canadian net-written premium and is expected to grow. In Canada, the market is seen as still profitable, particularly in comparison to U.S. markets. “Carriers with a North American presence benefit from the diversification, often using the Canadian market to support strong overall results,” the report states. “Premium savings are primarily driven by the introduction of new competition in the market.” Similarly, in property, the consulting firm says it has seen rate reductions over 10 per cent when a new market offers competing terms. “We’re seeing insurers that have traditionally not written certain risks or industries, coming to the table with capacity as they look for premium growth.”
On the flip side, they also say where clients are situated in high-hazard zones, especially those experiencing significant losses in previous years already, insurers are looking to apply rate increases between 10 and 15 per cent.
In its commentary about umbrella and excess liability, they say despite the expected rise in claims settlement costs and expenses, carriers continue to deploy large lines of capacity at competitive rates.
Going forward, they say there will be more emphasis on paying for coverage to address emerging exposure gaps in traditional commercial policies.
