Canada Insurance Market Rates Declines Across Property, Casualty, Cyber Lines

Canada insurance market saw further rate declines in 2024, with property, casualty, financial, and cyber lines experiencing reductions. Property insurance rates fell 3%, driven by strong market capacity and increased competition. Clients with solid risk profiles secured greater rate reductions, while underwriting remained focused on secondary perils and key industries.

Casualty insurance rates in Canada declined 2%, reflecting a competitive environment where insurers expanded limits and introduced new products. Claims inflation, particularly tied to U.S. exposures, remained a concern.

Some insurers set minimum pricing per million, especially for high U.S. limit purchases. Exclusions for PFAS, climate change, wildfire, and other risks became more common.

The Global Insurance Market Index is proprietary measure of commercial insurance rate changes at renewal. Below are insights into Canada insurance market. Beinsure analyzed the Marsh’s report and highlighted the key points.

Key Highlights

• Property Insurance Rates Decline – Global property insurance rates fell 3% due to strong capacity and competition. Clients with strong risk profiles benefited the most.
• Casualty Insurance Competitive in Canada – Rates dropped 2% as insurers expanded coverage limits and introduced new products. U.S. exposure remained a key pricing factor.
• Financial and Professional Lines Remain Favorable – Rates declined 3%, with directors and officers (D&O) liability insurance seeing stable conditions. Insurers focused on coverage enhancements over further rate reductions.
• Cyber Insurance Costs Continue to Drop – Rates fell 3%, driven by new capacity. Clients secured better coverage and lower retentions, particularly in excess layers.
• Market Stability Continues – Q4 2024 maintained the trend of pricing moderation across multiple insurance lines after years of volatility.

Financial and professional lines saw a 3% rate drop, with D&O liability insurance remaining favorable for clients. Insurers shifted their focus toward coverage enhancements, anticipating an increase in IPOs and transactional activity in 2025. Private D&O remained a key growth area.

Cyber insurance rates declined 3%, with new market capacity driving lower costs. Many clients secured broader coverage and reduced retentions without higher premiums. Excess layer savings contributed to overall reductions. The market maintained stability, following a year of pricing moderation after previous volatility.

Canada composite insurance rate change 

Canada Property Insurance: Rates Decline, Competition Increases

Global property insurance rates fell 3%, driven by ample capacity and increased competition. Many clients secured additional coverage limits, while those with strong risk profiles saw larger rate reductions, particularly from higher-rated insurers and new market entrants.

Underwriting practices remained stable, with a focus on managing secondary perils and specific industries such as warehousing, food and beverage, and recycling. Larger clients often received long-term agreements (LTAs) with built-in rate reductions based on performance.

Property Insurance Rates in Canada

Insured catastrophe losses in Canada reached a record C$8.5 bn ($5.9 bn) in 2024, nearly tripling the prior year’s total and standing 12 times higher than the annual average of C$701 mn recorded in the first decade of the 21st century.

Since 2020, five of the eight largest annual loss years for Canadian insurers have occurred. Losses in 2024, driven by nine major events, surpassed the C$6 bn record set in 2016 during the Fort McMurray wildfires.

Four events during the summer accounted for C$7.12 bn of the year’s total losses. These included unprecedented rain and flooding in Toronto and Montreal, along with wildfire and hail in Alberta.

Canada Casualty Insurance: Competitive Market Pushes Rates Lower

Casualty insurance rates in Canada declined 2%, reflecting a competitive market where traditional insurers and new entrants sought growth through expanded limits, new business classes, and product innovation. Insurers were more open to negotiating terms than in previous years.

Capacity deployment shifted, with insurers managing limits in umbrella layers while expanding in excess layers. Traditional excess insurers showed more interest in lower attachment points and primary layers.

Claims inflation, particularly related to U.S. exposures, remained a concern.

Canadian clients with U.S. exposure experienced lower rate decreases but benefited from access to more flexible local treaties. Some insurers set minimum pricing per million at all attachment points, especially within the first $100mn, in response to rising U.S. limit purchases.

Casualty Insurance Rates in Canada

Exclusions for per- and polyfluoroalkyl substances (PFAS) became more common, with limited exceptions for sudden and accidental pollution linked to foam firefighting.

Atlantic Canada has become a growing target for auto theft, according to the Insurance Bureau of Canada report. In the 2024, auto theft claims in the region rose by 13%, marking the highest increase nationwide.

Over the past decade, auto theft claims in the region have surged by 116%. In addition to the growing number of insurance claims, costs associated with auto theft are climbing. Claims costs increased by 11.8% in the 2024 compared to the previous year. Over the last ten years, these costs have skyrocketed by 265%.

Clients demonstrating a shift away from foam-based suppression had better coverage options. Other exclusions and sub-limits varied by risk class and included climate change, wildfire, failure to supply (energy/utilities), mental anguish, concussion, sexual abuse, and biometrics.

Canada Financial and Professional Lines: Rates Decline, Market Remains Favorable

Financial and professional lines rates dropped 3%, with directors and officers (D&O) liability insurance continuing its downward trend, though at a slower pace. New market entrants increased capacity, keeping rates lower.

Negotiations shifted toward coverage enhancements rather than rate reductions. Insurers anticipated increased IPO and transactional activity in 2025.

With limited opportunities in public D&O, insurers focused on private D&O, where rates remained favorable for well-rated companies.

Rate pressures in the D&O market led insurers to target new business and expand into ancillary lines. Fiduciary excessive fee litigation remained a key issue, while investment prudence emerged as a major underwriting focus. Employment practices liability (EPL) rates and exposure remained stable.

Cyber Insurance in Canada: Rates Decline, Coverage Expands

Cyber insurance rates fell 3% as new capacity entered the market. Primary layers typically saw a 5% reduction if client exposure and program structure remained unchanged. Many clients secured improved coverage and lower retentions without premium increases.

Premium reductions in excess layers were a key factor in overall program savings, with decreases ranging from 3% to 10% when primary layers renewed at flat rates.

Coverage improved, with some clients removing coinsurance requirements and increasing sub-limited enhancements. Those with stronger cybersecurity controls had more leverage in negotiating lower retentions.

Q4 2024 continued the stability trend that began a year earlier, as both clients and insurers moved away from the aggressive marketing seen in previous periods.

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