| Trend | Range | |
|---|---|---|
| Non-catastrophe exposed |  |
–15% to Flat |
| Catastrophe exposed |  |
–5% to +5% |
Canadian property rates continued to soften in Q3 as insurers competed for market share by deploying additional capacity. This resulted in overlined placements, with some top-tier risks in excess of 20%. With so much capacity in play, insureds were able to select their insurer panel based upon most favorable ratings, improved coverage, reduced deductibles and preferred insurer partnerships. Top-line growth continues to be the key message from insurers throughout 2025 despite another summer of significant wildfires and convective storm events in Canada. At the time of writing, losses are expected to primarily impact the personal lines market, and with historic high amounts of reinsurance capacity available, rates for commercial property risks are expected to remain stable into 2026.
Canada experienced its second-worst wildfire season on record, with over 7.25 million hectares burned, second only to 2023, which saw 18.5 million hectares burned[1].The personal lines market has experienced the majority of wildfire and convective storm insurable losses to date; the commercial property market has been relatively unscathed and for the majority of 2025 has benefited from the competitive market conditions and plentiful reinsurance capacity available[2]. That said, there's concern that as Q3 sees a spike in weather-related events on an annual basis, that may put pressure on insurers to adjust both their coverage and pricing levels to manage increased losses in wildfire and convective storm prone regions[3]. Insureds located in these regions are encouraged to review their limits, sublimits and terms and conditions on an annual basis to confirm they have appropriate levels of coverage. The policy limit needs to cover both the damage to physical assets and key sublimits such as restrictions due to Civil Authority, Ingress/Egress, Service Interruption, Spoilage and Preservation of Property, amongst others. In light of significant wildfire losses in West Kelowna, British Columbia and Jasper, Alberta, in 2023 and 2024 respectively, that caused significant damage to local businesses and infrastructure, insureds need to ensure they have appropriate coverage not just for their physical values, but also their business interruption indemnity period[4]. Insureds need to review their supply chains, access to materials and spare levels to ensure that their indemnity periods are sufficient to rebuild and return to pre-loss operation levels.
The influx in capacity continued in 2025, fueled both by domestic and global insurers deploying additional capacity on Canadian risks. Domestic insurers continue to expand their underwriting appetite into new exposures and industries. Foreign markets and London backed facilities are also competing for participation on Canadian risks. All this capacity generates competition and thus there is downward pressure on rates. The competitive rate environment is expected to continue into 2026 as reinsurance capacity remains plentiful and able to absorb an increase in property limit demand. As reported by the Insurance Institute of Canada, reinsurance rate-on-line rates has ~8% globally in 2025[5]. Barring any significant losses for the balance of the year, we expect reinsurance capacity to remain high and reinsurance rates to remain soft into 2026.
Canada’s inflation has eased for five consecutive quarters starting in Q2 2024, so while there's less focus on inflationary impact on values, insurers still need to ensure that replacement values are accurate. Tariffs continue to loom over the Canadian economy, impacting some sectors of the economy more so than others. Insureds are recommended to monitor their supply chains and cost of critical parts and equipment so that replacement cost values and program limits are adequate in the event of a loss. Site surveys and recommendation updates remain important in order for insurers to deploy maximum capacity, especially for insureds with large and complex exposures.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
