With Canada’s insurance market currently awash with capacity and pricing remaining highly competitive, the next phase of the cycle will depend heavily on how this year’s catastrophe season unfolds, according to Marc Major (pictured), global placement leader at Marsh Canada.
Major sees a clear set of factors that market participants should monitor as they assess how conditions may evolve from the baseline scenario of continued competition on price.
“The interesting thing that we’re noticing now as we head into [the rest of] spring is: is there a chance of overflow from winter meltdown?” he says. “And so if we have that, could there be flooding issues?”
He notes that similar conditions three or four years ago resulted in sizeable losses, but did not fundamentally shift overall market conditions. “We had those same events three, four years ago, and it certainly had an impact, and there were significant losses that occurred – but not to the point where it impacted the overall market in a significant way,” he says.
The key question, Major suggests, is whether multiple adverse events will collide over the coming months. Spring melt, flooding, wildfires and other natural catastrophes all have the potential to shape market sentiment and results into late 2026.
“If we have all of these factors hitting – spring meltdown, wildfires and natural catastrophe – we’ll definitely see some reaction as we move into the third and fourth quarter of the year,” he says.
Any such losses would also flow through to reinsurance, with potential consequences for upcoming treaty renewals. “We’ll see [impacts] as well as into the reinsurance treaty renewals that get impacted and signed in January of 2027,” Major notes.
On the other hand, a benign catastrophe year would likely extend the current trend, with pricing remaining competitive and capital continuing to pursue new clients and accounts. “And I think that will just continue the current trend that we’re seeing today,” he says.
Beyond weather and natural catastrophe risk, Major flags a broader set of macro factors that could influence the market, particularly within specialty and niche product segments.
He points to the possibility of “significant additional global unrest or unease” – whether in the form of war, geopolitical tension or trade and commerce disputes – that could disrupt supply chains and trigger additional insured losses. He warns that such developments could interfere with trade flows and, as a result, generate further claims pressure for insurers.
Cyber risk is another area of concern, with the potential for major events to reshape pricing and capacity in that segment. Major notes that significant cyber incidents could alter conditions for certain specialty classes, adding new complexities and pressure to those product lines.
For the broader Canadian property and casualty market, however, he returns to catastrophe outcomes as the main signal of where conditions will head next. “I think the big indicators would be how our CAT season gets impacted,” he says.
For now, Major is clear in his characterization of the current environment. “I would say it is a soft market – not even softening – but these conditions will continue throughout the course of this year,” he says.
That softness is closely tied to the level of interest in Canada from both domestic and international insurance players. Major cites merger and acquisition (M&A) activity in the sector, as well as broader competitive positioning, as evidence of how attractive the market has become.
Whether through transactions within the insurance sector or through carriers stepping up their push into Canadian business, he sees a strong willingness to deploy capacity. He says both M&A activity and the broader drive to participate in the Canadian marketplace are key reasons why conditions remain so soft.
“It’s an attractive market, is probably the way you could put it. The Canadian insurance market is an attractive market to play in.”
