The Canadian property and casualty (P&C) insurance market is in a resilient and stable position, but buyers can expect conditions to remain soft for some time yet, according to Aon Canada president Stéphane Lespérance (pictured).
Speaking in an interview with Insurance Business, Lespérance said insurers’ broad appetite and steady capacity are creating a buyer-friendly environment, even as certain outliers buck the trend.
“The Canadian insurance market is a resilient market in the sense that there’s capacity available, there’s enough appetite from the insurers to write new risks,” Lespérance said. “It’s been resilient in a way that it’s gone through various cycles and somehow remains stable. It’s a good market to be in.”
That resilience is attracting international players. Lespérance noted that overseas carriers see opportunity in Canada and are seeking to enter the market, adding to a diversified ecosystem of brokers, carriers, and a growing number of MGAs. “Despite mergers, there’s still a variety of markets wanting to write Canadian business,” he said.
While some expected the post-pandemic hard market to last longer, Lespérance said current conditions are firmly on the softening side of the cycle. “Right now, we’re talking about a buyer-friendly market, which is the case,” he said. “We’re not at the bottom of the soft market – I think it will continue.”
That doesn’t mean conditions are uniform across all industries or lines. For straightforward risks in traditional sectors, competition is intense and coverage is relatively easy to secure. For complex or specialized industries, capacity still depends on risk quality, modeling, and strong management practices.
Certain lines stand out as particularly soft. Cyber insurance, often cited as a potential hard-market candidate, is currently offering favorable terms, Lespérance observed. “I’m not seeing a harder market on the cyber side,” he said. “Premiums are softening. Insurers have had way more opportunity over the last couple of years to understand the risks, and there’s broader appetite to take more of that business, being more creative, developing new products and solutions.”
Directors and officers liability is another area where conditions remain highly favorable. “The D&O market is really soft with aggressive conditions,” Lespérance said.
Not every line is moving in lockstep with the broader softening trend. For sectors with large, complex exposures – such as energy, pulp and paper, or heavy manufacturing – insurers are still cautious. These industries face elevated risk profiles, ranging from fire and machinery breakdown to natural catastrophe exposures and environmental liabilities.
“Depending on the risk you’re offering to an insurance carrier, if it’s hard to place or in a more complex industry, it’s not as soft as you would think,” Lespérance said.
Large-scale industrial assets often require detailed catastrophe modeling and robust risk management programs before insurers are willing to deploy significant capacity. Carriers want to see evidence of strong safety systems, comprehensive loss-prevention practices, and investment in resiliency. Without these, capacity is either more limited or priced at a premium.
Even when coverage is available, it may come with tighter terms and conditions than what’s seen in more commoditized lines. Buyers in these sectors may need to build multi-insurer towers or work with specialized underwriters to secure the necessary protection. In this sense, the complexity of the risk itself is keeping those markets relatively disciplined, even as other areas like cyber and D&O become increasingly competitive.
Asked what would indicate a shift away from soft conditions, Lespérance pointed to underwriting performance. “The minute we see combined loss ratios deteriorating again, that will probably indicate the early signs of a hardening market,” he said. Until then, abundant capacity and appetite are likely to keep downward pressure on pricing.
For Canadian insurance buyers, the present environment offers an opportunity to secure favorable terms. But Lespérance stressed that the resilience of the market is as important as its current softness. “The market is diversified, with a wide offering for consumers,” he said. “It’s a buyer-friendly market today, but also a resilient one that has shown stability across cycles.”
That combination – resilience with buyer-friendly conditions – makes Canada’s P&C market an attractive environment for both clients and carriers, he said.
