Canadian middle market businesses are navigating a period of uncertainty, and increasingly seeking insurers that can act as comprehensive risk partners.
That is according to James Lee, chief agent and head of client & distribution at AXA XL, who said that companies in this segment are contending with a wave of pressures – from cyber threats and AI disruption to geopolitical volatility and economic turbulence.
As they confront these complexities, many are looking for a “one-stop-shop” insurer that can provide broad expertise, global reach, and tailored support across coverage lines.
“In the short term, we are in a time of economic uncertainty. We need to navigate through the ripple effects of what is happening in the US,” he said.
It is against this backdrop that AXA XL has entered Canada’s middle market space. Lee said that the main reason to commit to delivering tailored coverage is that the segment is facing challenges that pose an opportunity for insurers.
AXA XL defines the middle market as businesses with up to $500 million in annual revenue or total insured values (TIV), measured in Canadian dollars. These companies, Lee said, sit between small enterprises and large national or multinational corporations – big enough to face complex risks, but often without the in-house infrastructure or depth of resources to manage them independently.
Lee said this group is even more important as it makes up the backbone of the Canadian economy. However, they are grappling with a growing list of concerns – from global recessionary signals and geopolitical volatility to climate change, cyber threats, and the rising influence of AI.
He noted that these pressures are reshaping how underwriters evaluate risk.
“It’s keeping our underwriters vigilant,” he said, adding that insurers need to go beyond traditional risk assessments. Instead, they must ask more targeted questions to understand where clients operate, how they function, and what exposures may exist under the surface.
Lee pointed out that middle market firms frequently lack dedicated risk specialists like chief technology officers, which may make them more vulnerable to challenges like cyberattacks.
“They may not have the resources to effectively mitigate risks and respond accordingly,” he said, adding that insurers need to step in – not just to provide coverage, but also expert guidance, risk engineering, and access to broader support services.
Middle-market clients are also increasingly seeking insurers who can address multiple coverage needs under one roof, Lee said. Whether it’s cyber, liability, property, or multinational exposure, middle market firms are drawn to providers with the capacity to manage all facets of their risk profile.
“One of the things that we're seeing is that many companies are looking for a single insurance carrier that can meet all of their insurance needs.”
This one-stop-shop model, he added, is especially important as Canadian businesses expand their international footprints and require help navigating insurance regulations beyond North America.
In terms of sector growth, Lee highlighted two standouts: construction and technology.
On the tech front, he pointed to Canada’s strong post-secondary institutions, rich startup culture, and deep talent pool as factors contributing to a boom in technology-focused businesses.
Many of these companies, he said, are scaling rapidly and encountering complex digital risks along the way. As they grow, their need for nuanced, tech-aware insurance solutions becomes more acute.
Construction is another area of rapid expansion – particularly among mid-sized contractors, Lee said.
While Canada is home to large, national construction firms, he said a new tier of smaller and mid-market companies is emerging to take on a growing number of infrastructure and development projects.
“We certainly have these mammoth international or national construction firms, but we've got another level of companies that are well positioned to take on complex projects,” he said.
Although the short-term landscape remains uncertain, Lee was decidedly bullish about Canada’s middle market in the long run.
He noted that Canada’s economy is heavily powered by mid-sized enterprises – and that these firms have long demonstrated a reputation for creativity, adaptability, and global competitiveness. As Canadian companies continue to innovate and expand their reach, Lee believes they will earn greater recognition not only in the US, but on the global stage.
“We are predominantly a middle market business country,” he said. “And I think that segment will continue to boom in the long term.”
