The Canadian commercial insurance market is in a soft cycle, with rates down an average of four percent in 2025 and that pressure carrying into Q1 2026. For carriers, the challenge is no longer simply on price, it's on what else they can offer. Terryl Varghese of Unica Insurance makes the case for responsiveness, underwriting clarity, and the ability to find solutions for risks that fall outside standard categories.
Three forces are converging to push rates down. Catastrophic weather losses dropped sharply from 2024 to 2025. Global reinsurance rate-on-line rates softened by approximately eight percent in 2025, keeping commercial property rates stable. New entrants also added capacity. "Insurers have been reporting improved results, higher investment income, and increased competition, [all of which] have helped stall the steep premium hikes that businesses experienced in 2024," said Terryl Varghese, senior commercial property, casualty and fleet underwriter at Unica Insurance. Both domestic insurers and foreign markets are competing for Canadian risks, and that downward pressure has continued into 2026.
2024 set back-to-back records. Catastrophe claims exceeded 273,000, beating the previous high of 197,000 from 2016. Four individual events each generated losses exceeding $1 billion. The Insurance Bureau of Canada put total severe weather-related losses at around $8.5 billion. Over the decade from 2016 to 2025, Canada's insured losses from catastrophic weather and wildfires reached approximately $37 billion, compared to $14 billion in the prior decade. Then 2025 changed the picture. "There have not been many events in 2025 or 2026 compared to the CAT losses in 2024," Varghese told Insurance Business. "In 2025, that figure was around $2.4 billion, and right now we're seeing the carryover effects of that."
Brokers now put responsiveness first. A November 2025 Insurance Business America survey of 1,200 insurance professionals found it to be the single most important attribute brokers look for in wholesale and carrier partners, rated at an average importance score of 4.81 out of five. The market's performance on that measure came in at 4.18. That gap of 0.63 is the largest discrepancy of any measured attribute in the survey. Speed alone is not enough. "Brokers are being asked to [offer] more sophisticated risk advisory work in an increasingly competitive environment," Varghese said. "There's also the ease-of-doing-business aspect. [Brokers] are looking to collaborate with their insurers to find creative solutions to address complex risks."
Price has lost its edge. "Right now, given the environment, price is no longer a differentiator," Varghese said. "In this current, time-sensitive market, brokers are looking to engage with their underwriters more directly and offer technical insight. [Furthermore], in a dynamic market, brokers gravitate towards carriers that they can depend on, as predictability enables them to place business effectively and manage client expectations." Predictability matters because brokers need to set accurate expectations with their own clients. "Here, underwriting clarity and consistency are very important," he told Insurance Business. Carriers that deliver on both build the trust that sustains long-term placement relationships.
Specialised underwriting gives brokers a reason to return. Carriers that work with non-standard risks open new options for their broker partners. "Most underwriters will [categorize] what a risk falls into and go with that," Varghese said. "[However], if you can find a way to work directly with a broker, you can address risks that don't fit into that standard box. This also allows brokers to diversify their portfolio with the insurer. So instead of being all focused on one segment, this helps diversify the broker's business with the insurer as well as delivering competitive pricing solutions for risks that extend beyond the appetite of other insurers."
Commercial insurance leads all industries in retention. A 2025 First Page Sage analysis of more than 10,000 firms put the commercial insurance customer-retention rate at 86 percent, driven by high switching costs and long-standing broker-carrier relationships. Maintaining that rate demands more than sharp pricing. "While pricing plays a big role in winning the business, superior service is fundamental in retaining it," Varghese said. "If you can write it one year, you have to be able to provide the service in order to retain it the [following] year." Data and speed matter too. "Differentiation will increasingly depend on a quick turnaround of quotes and data-driven insights which strengthen broker relationships," he added.
"Disciplined underwriting allows insurers to respond to changing market conditions with greater consistency and stability," Varghese said. "At Unica, we're looking at all these aspects as we progress throughout the rest of the year and into 2027. At the same time, Unica has expanded its commercial appetite to better respond to soft market conditions, while also taking a more transparent and structured approach to how that appetite is communicated. Supported by clearer tools and guidance, this gives brokers greater visibility into both our target risks and areas of lower appetite, enabling them to place business with greater confidence, reduce uncertainty, and strengthen long-term partnerships in an increasingly competitive landscape." Founded in 1955, Unica Insurance is a subsidiary of Beneva Insurance Company. Its products are available exclusively through select professional brokers in Ontario. For further sponsored analysis on the Canadian market, see Insurance Business Canada premium features.
Terryl Varghese: senior commercial property, casualty and fleet underwriter, Unica Insurance; Unica is a subsidiary of Beneva Insurance Company; founded in 1955; products delivered exclusively through a network of select professional insurance brokers across Ontario.