A new report from Aon finds Canada’s property and casualty insurance market entering 2026 with strong capacity, stable pricing and increased competition, even as costs tied to auto repair and labour remain elevated.
In the foreword, Russ Quilley (pictured), head of commercial risk, Canada and chief broking officer, writes, “The Canadian P&C insurance market enters Spring 2026 from a position of strength, underpinned by solid capitalization, strong underwriting performance, and a competitive landscape that continues to evolve.”
The report shows insurers are expanding in Canada, with more capital available to write business. Quilley writes, “Capacity is ample across many lines, and both domestic and international insurers are actively deploying limits into Canada, with a clear focus on retaining high quality business and expanding market share.”
That increase in capacity is affecting pricing and coverage. Quilley writes, “For many organizations, this is translating into more favourable pricing, broader coverage and greater flexibility to reshape program structures that were constrained in prior years.”
The report also highlights ongoing cost pressure in key areas tied to claims. Even with inflation easing to about 2.1% in 2025, costs remain elevated in sectors such as auto repair and labour-intensive services.
Globally, insured catastrophe losses reached US$127 billion in 2025, marking the sixth straight year above US$100 billion. Severe convective storms accounted for about half of those losses.
In Canada, catastrophe losses were lower. The largest event in 2025, a winter storm in Ontario and Quebec, caused about $0.5 billion in insured damage, giving insurers a chance to recover after heavier losses in 2024.
Reinsurance conditions are also shaping the market. Global reinsurance capital rose to about US$760 billion by late 2025, increasing available capacity and competition. Canadian renewals at Jan. 1, 2026 were marked by strong capacity and favourable outcomes for buyers.
Quilley cautions that risks remain. “Climate driven catastrophe activity, supply chain fragility, social inflation, cyber threats, and geopolitical tensions continue to drive volatility in loss experience and capital markets.”
He adds that current conditions may not last. “External forces, including evolving regulation, climate related events, and shifting litigation trends, can quickly influence insurer appetite and capacity.”
The report frames the current market as a short-term opportunity. “Current conditions represent an important window for clients to strengthen their insurance and risk financing programs.”
