Canada Insurance Market Rates

Property insurance rates decline

Property insurance rates declined 1%.

• Canada recently experienced four costly catastrophe (CAT) events: hail in Calgary, wildfire in Jasper, and flooding in the Toronto and Montreal areas; it remains to be seen how these events will impact insurance markets.
• Ample capacity continued to be available, both domestically and internationally.
• Underwriters continued to scrutinize secondary perils management.

Insurer competition continues to support casualty rate decline

Casualty insurance rates decreased 4%, driven by general liability.

• Insurers generally made available less capacity in the umbrella layers, but generally deployed more in excess layers.
• Insurer competition continued, generally resulting in greater limits being deployed as insurers entered new classes of business/industries and were typically more willing to negotiate terms and conditions.
• Canadian clients with US exposure continued to be affected by large jury verdicts in the US, particularly for automobile accidents, product liability, medical liability, and premises liability.
  • Canadian clients typically benefited from their ability to access Canadian insurers.
• Insurers continued to place exclusions on per- and polyfluoroalkyl substances (PFAS); some exceptions were available.
• Other exclusions and sub-limits included those for climate change; wildfire; failure to supply for energy, power, and utility organizations; mental anguish; concussion; sexual abuse; and biometric.
• Significant losses and settlements — from claims related to opioids, mass shootings, vehicle collisions, non-owned auto exposures, class actions arising from PTSD, and product liability —  generally led to more restrictive policies being offered, and an increase in underwriting information requirements.

Financial and professional lines rates decline

Financial and professional lines rates declined 5%.

• The D&O market remained favorable as rates continued to decrease, although at a moderating pace.
  • Small to midsize private companies typically saw greater decreases as compared to larger private companies, which generally experienced more moderate decreases.
  • Excess insurers increasingly looked to participate lower on towers.
  • Underwriters scrutinized artificial intelligence (AI) and how it is integrated and monitored in operations.
•     In fiduciary markets, imprudent investment choices were increasingly an underwriting concern.
  • Class action retentions and limit reductions have generally been imposed on large clients.
• Rates for employment practices liability (EPL) insurance remained stable; underwriter concerns centered on Biometric Information Privacy Act (BIPA) claims, class action litigation, social inflation due to large jury awards, and the use of AI in an employment setting.

Cyber rates decline, coverage broadens

Cyber insurance rates decreased 1%.

• For clients with no significant changes to exposure or program structure, rate decreases of 5% in the primary layer were observed.
• Many clients bolstered coverage and/or reduced retentions.
• Excess layer rate reductions were the main contributor to program savings.
  • When a primary layer renewed flat, reductions of 5% to 10% were typically available on the excess layer.
• New capacity continued to enter the market.
• Coverage continued to broaden, and at times included removal of coinsurance requirements and increased coverage sub-limits.
• Insurers continued to view clients with cybersecurity improvements favorably, typically opening the possibility for lower retentions.

Our rates reflect the segment mix of Marsh’s client portfolio.