After several years of a hard market, commercial property and casualty (P&C) insurance conditions are showing signs of softening, opening the door for businesses to benefit from more favourable pricing and broader coverage options, particularly with the guidance of experienced brokers. 

Navacord, one of Canada’s largest commercial insurance brokerages, has published its latest Crosswinds and Currents market outlook. The report notes that a significant shift driven by increased competition, the return of Lloyd’s of London to the Canadian market, and the arrival of new players, is driving an improved offering capacity. 

The report highlights that ongoing uncertainty, particularly stemming from aggressive U.S. trade policies, continues to weigh on investment decisions. “This pause in activity is leading to future uncertainty in the directors and officers (D&O) market,” the authors write. 

Real estate and commercial property 

The growing appetite of general agents (MGAs) is forcing domestic insurers to sharpen their pencils when underwriting risks associated with commercial buildings.

Navacord notes that underwriters are now offering higher limits and lowering deductibles – especially for flood risks – in an effort to attract new business. 

However, “clients who demonstrate a lack of attention to property loss prevention could still see increases, even in a soft market,” add the authors. 

Strict underwriting remains the norm for new commercial properties, particularly given the uptick in extreme weather events. “Clients must establish risk mitigation programs and take advantage of new technology, particularly in new builds and conversions in the residential space.” 

In commercial general liability, the intensified presence of Lloyd’s is boosting market competitiveness. The report notes that long-tail environmental risks – including those related to so-called “forever chemicals” such as PFAS (per- and polyfluoroalkyl substances) – are increasingly subject to exclusions or limitations in coverage. 

Navacord also reports that umbrella and excess liability coverages are becoming more accessible, with broader limits available. This is particularly evident in the construction sector, where general and excess liability pricing is easing. 

“Carriers are showing expanded appetite interest for historically challenged classes such as mechanical and restoration contractors. Roofing, protective services, and environmental and higher-hazard industrial contractors will also find some savings,” the report states. 

Still, limited capacity in some areas is leading to steeper increases in property insurance premiums, particularly for production equipment coverage. 

With the increasing frequency of climate-related catastrophic losses, Navacord notes a rise in interest in alternative risk transfer solutions. Since 2022, a total of 33 captive insurers have been established in Alberta, which offers a more straightforward regulatory framework compared to offshore jurisdictions in the Caribbean. 

In the Prairie provinces, agriculture plays a major role in the local economy. With many agribusinesses already diversifying their export markets, Navacord suggests that those involved in overseas trade should consult brokers to reassess their risk management strategies in the London market. 

Personal lines: a challenging environment 

The personal insurance market remains under pressure, largely due to the elevated cost of reinsurance. This is a direct consequence of a series of severe weather events, including the devastating storms that struck Canada in 2024. 

The trend has continued into 2025. The report highlights the late-March ice storm that swept through Ontario and Quebec, with Catastrophe Indices and Quantification Inc. (CatIQ) estimating $416 million in insured damages.

Western provinces also saw extensive wildfire activity, forcing evacuations in parts of Saskatchewan and Manitoba. Meanwhile, events in the United States, including hurricanes last fall in Florida and wildfires in Los Angeles in January, have further strained global reinsurance markets. 

Despite increased comparison shopping by consumers, the home insurance market remains tight. Rebuilding costs continue to rise faster than inflation, leaving little room for pricing relief. 

In auto insurance, premium pressures persist, fuelled by high repair costs, rising theft rates, and shifting regulatory policies at the provincial level. The ongoing trade war with the United States adds further uncertainty. 

While joint efforts between authorities and insurers have curbed some vehicle theft, recovery rates remain low. Organized crime networks are now targeting newer luxury vehicles in particular. 

Navacord emphasizes its leadership in the travel insurance space, where brokers are playing a critical role in helping consumers navigate issues related to immigration and visa requirements. With airlines adding more routes to destinations beyond the U.S., travel insurance needs are becoming increasingly complex.