Canadian commercial insurance rates declined 6% in the third quarter of 2026, continuing a run of consecutive quarterly decreases that now stretches into a third year, according to Marsh’s Global Insurance Market Index (GIMI) for Q3 2026. Property led the decline at 8%, with reductions recorded across all segments, industries, and customer risk profiles. But the composite figure covers a market that is increasingly divided, and the conditions shaping outcomes for one client can look almost nothing like those facing another.
That divide between clean Canada-only risks and accounts with US exposure, loss histories, or CAT-exposed assets is the defining feature of the current cycle, and it is getting more pronounced.
Property rates fell 8% in Q3 2026, with large accounts above $1 million in premium seeing double-digit reductions in some cases. Natural resources accounts saw among the largest reductions of any sector, according to Marsh, with power and energy leading declines. Strong insurer results and lower reinsurance costs materially expanded capacity, while competition was observed broadly across sectors and regions.
Underwriters generally offered policy concessions to win business and eased submission and valuation scrutiny, relying more on historical data and alternative information sources. Best-in-class submission data continued to produce stronger outcomes, though the margin between well-documented and poorly-documented risks remains visible. A material adverse loss, Marsh noted, could affect capacity availability and pricing, a qualifier worth carrying into any renewal conversation where the account history is not clean.
The softening of Canadian commercial property rates has been building since late 2024, supported by lower global reinsurance costs and the absence of a major domestic catastrophe year in 2025. Canada recorded more than $8.5 billion in insured catastrophe losses in 2024, according to CatIQ, cited by the Insurance Bureau of Canada. That backdrop may not hold indefinitely.
Casualty rates declined 3% overall in Q3 2026, the 13th consecutive quarterly decrease, but the headline masks different conditions depending on the account’s exposure profile.
Canada-only risks with favourable loss histories continued to attract competitive pricing and expanded capacity. For those accounts, new market entrants and broader coverage offerings kept pressure on primary pricing, and specialty capacity remained available. Insurers expanded coverage lines and used more insured-favourable wording, often tailored to specific industry sectors.
Accounts with US exposure operated in a different market. Canadian programs with US exposure frequently required separate US layers or sub-limits, higher retentions, or limited rate relief. US-domiciled or materially US-exposed programs saw the sharpest deterioration, with single- to double-digit increases, higher attachment points, and reduced available capacity in some cases.
That pattern tracks with conditions in the US itself, where casualty rates rose 6% in Q3 2026 - the only region in Marsh’s global index to register a casualty increase - driven by social inflation, nuclear verdicts, and what Marsh describes as an adverse litigation environment. The cross-border exposure problem has become one of the more persistent renewal challenges for Canadian brokers with US-facing clients.
Per- and polyfluoroalkyl substances (PFAS) and wildfire underwriting added another layer of complexity. Both are now subject to increasingly detailed review, including annual or site-specific assessments, wildfire scoring tiers, mitigation-linked pricing, sub-limits, deductibles, and selective non-renewals in elevated-risk zones. Rising claim severity, nuclear verdicts, and social inflation continued to reshape structure and pricing for accounts with US auto exposure, including higher attachment points and corridor or shared-loss arrangements.
Financial and professional lines rates fell 4% in Q3 2026, compared with a 7% decline in the prior quarter, and the 15th consecutive quarterly decrease. Directors and officers (D&O) liability rates declined by low single digits on average, with select layers seeing targeted reductions but no broad portfolio-wide cuts. Employment practices liability (EPL) and fiduciary liability pricing held flat despite rising litigation. That signals insurers are holding the line even where the overall direction remains downward.
One development worth watching: some insurer consolidation is already underway in the Canadian financial lines market. While current capacity remains adequate, some insurer consolidation already under way in the Canadian financial lines market could limit availability over the coming year, Marsh noted. That is not a current pricing problem, but it is a forward-looking one, and it makes the current window for locking in multi-year structures more valuable than the headline rate alone suggests.
Cyber rates fell 5% in Q3 2026, down slightly from a 6% decrease in the prior quarter. New capacity continued to enter the market across primary and excess layers, and insureds with stronger cybersecurity controls were able to negotiate lower retentions. The structural picture, however, is less comfortable. Claims frequency remained steady while severity continued to rise, with ransomware and privacy events the costliest drivers. The gap between a softening cyber market and rising underlying risk is one of the more consequential asymmetries in the current Canadian market.
In its global commentary accompanying the index, Marsh noted that geopolitical uncertainty was leading many buyers to retain premium savings rather than reinvest them in broader coverage. In Canada’s current environment, where the property and financial lines windows are open but casualty complexity is real and capacity consolidation is beginning in some lines, that instinct to bank savings rather than restructure carries a different kind of risk from the one being priced.
