Canada’s complex risk market is in flux – not because capacity has disappeared, but because there is suddenly more of it, and it’s coming from directions some underwriters didn’t expect.
From her vantage point at SPG Canada, executive vice president Diana Charters (pictured) is seeing a notable shift in who is willing to write tougher, higher‑hazard business – and how much they are prepared to put up.
“We’re seeing new capacity entering the complex risk space and interestingly, a significant portion of it is coming from domestic markets,” Charters said. “Carriers that wouldn’t have looked at certain classes two or three years ago are now actively writing them, and in some cases offering higher limits than we’ve seen in a long time. That’s a meaningful shift.”
The most notable change is the growing willingness of domestic insurers to consider risks that previously moved quickly to specialty or London markets, particularly at the primary layer.
Much of this expansion follows several profitable years during the hard market, which strengthened balance sheets and encouraged carriers to reassess where they are willing to compete.
“The driver behind that is straightforward: the hard market correction generated strong profitability, and that profitability is now attracting competition and encouraging incumbent players to push further,” she noted.
The shift is not confined to a few new entrants but is appearing across a wider portion of the domestic market.
Alongside domestic expansion, brokers are also seeing increased participation from delegated authority players and London markets.
“We’re seeing a proliferation of new local and London MGAs and Lloyd’s syndicates entering the market,” she said. “And it’s not just new entrants – it’s existing domestic markets and local MGAs that are also expanding their appetites, moving into higher‑risk classes and deploying more capacity than before.”
After several years of limited options on complex placements, the increase in participating markets is giving brokers greater flexibility when structuring programs.
“For brokers, this is good news in terms of options,” she said. “For underwriters like us, it means the discipline of the last few years is being tested.”
The impact of these appetite shifts is becoming most visible in how programs are now structured and where specialty markets are being asked to participate.
“The most notable shift we’re seeing is in how submissions are coming to us; specifically, a significant increase in excess liability requests on complex and hard‑to‑place risks,” Charters explained.
What is interesting to her is that many of these are accounts where brokers used to approach MGAs for the primary.
“Now, domestic markets are stepping up to write the primary and often as part of a package, then we’re being asked to sit excess instead.”
Risks that once relied on specialty capacity throughout the tower are increasingly being placed domestically at the primary level, leaving specialty insurers to support excess layers instead.
“That’s a direct consequence of the appetite expansion we’re seeing across the market,” she said. “Domestics are taking on risks at the primary level that they simply wouldn’t have considered a few years ago, which is pushing the harder, higher‑hazard business further up the tower and onto our desk.”
While submissions continue to span multiple industries, the profile of risks reaching specialty markets is evolving.
“We’re still seeing a wide breadth,” she said, “but the nature of what’s coming in is changing. More high‑risk operations, more submissions that reflect the outer edges of what domestic markets are comfortable writing.”
As more challenging risks move higher into liability towers, specialty underwriters are reassessing attachment strategies, aggregation exposure and capital deployment.
“The volume of excess layer requests in particular is something we’re paying close attention to because it changes how we think about attachment points, aggregation, and our overall portfolio,” she said.
The expansion of capacity also raises a familiar market concern: whether underwriting discipline can hold as competition intensifies.
“The question is whether this new and expanded capacity holds its pricing and terms, or whether it starts chasing premium at the expense of underwriting quality,” Charters warned.
Greater participation can ease placement challenges and improve options for complex clients, but competitive pressure also increases the risk that pricing, structure or risk selection standards begin to erode.
For brokers, the opportunity is clear: more options and potentially sharper terms on difficult placements. For underwriters, the message from SPG Canada is more cautious.
“We’ve all worked hard over the last few years to re‑set the market on complex risk,” Charters said. “The real test now is whether we can maintain that discipline in an environment where capacity is growing and competition is increasing.”
