There’s no shortage of money in Canada’s property and casualty (P&C) insurance sector – but there might be a shortage of deals that make sense.
At the AM Best conference, Gord Dowhan (pictured right), chief financial officer at Wawanesa Mutual Insurance, summed up the paradox simply: “If you look at the P&C space, there’s capital out there – so there are opportunities. But if you look at it right now from a valuation perspective, given there are limited opportunities, it does come with a bit of a premium.”
That gap – between capital and opportunity – defines the current consolidation lull. While global insurers chase scale, Canada’s P&C market has remained fragmented, conservative, and well-capitalized. The reason, as Dowhan sees it, might not be the lack of ambition. It’s price.
“We haven’t seen on the P&C side the same consolidation that we’ve seen on the life and health side,” Dowhan said.
His comment reflects a reality that investment bankers and analysts have noted for years: Canada’s P&C industry, populated by strong mutuals, regionals, and foreign-owned branches, isn’t under the same structural pressure to merge as life insurers have been.
Most players have surplus capital and steady underwriting performance. That combination dulls the urgency to sell – and limits bargains for would-be buyers. Unlike life insurers, which have turned to M&A to spread product risk or unlock expense synergies, P&C carriers often see more risk than reward in acquisition. Regulatory capital charges, integration costs, and mutual governance constraints keep the field relatively quiet.
Dowhan’s emphasis on pricing wasn’t rhetorical. “Given there are limited opportunities, it does come with a bit of a premium,” he said.
That “premium” has become shorthand for the private-market valuation inflation that followed years of strong returns and minimal distress. Simply put, sellers can wait, and buyers can’t afford to overpay.
Even firms that might want to expand – regionals seeking new geographies or product lines – are finding that potential targets are neither cheap nor eager. Analysts say that with book values rising and catastrophe experience stabilizing, most P&C balance sheets are in no need of rescue capital. “There’s capital out there,” as Dowhan noted, but it’s patient capital.
Yet the slowdown isn’t just Canadian. Across North America, agency and brokerage M&A has lost momentum. Insurance agency mergers and acquisitions in the United States and Canada totaled 520 announced deals in the first three quarters of 2025, according to OPTIS Partners’ latest data – a 7% decline from the same period last year.
The third quarter brought a modest uptick, with 188 transactions, up 5% from Q2, but analysts expect the full-year pace to remain below 2024. “Looking ahead to the fourth quarter, we expect activity to be equal to or slightly below Q4 2024, thus continuing the trend of the last three years,” said Steve Germundson, partner at OPTIS Partners.
The top buyers are familiar names. BroadStreet Partners led all acquirers with 57 transactions, down from 72 a year earlier. Hub International followed with 38. Alera Group doubled its deal count over the past year, while HighStreet Partners and King Risk Partners both grew their volumes sharply.
Private equity remains the engine behind most deals – accounting for roughly 72% of transactions – but even that cohort is showing signs of selectivity. “There are interesting dynamics underway. A few new investors are in the market for the first time,” said OPTIS managing partner Timothy Cunningham, noting a slowdown among both private-equity and privately owned buyers.
The pattern mirrors what Dowhan described in the carrier space: capital is plentiful, but conviction is rare. Global dealmaking has softened, with overall insurance M&A, venture financing, and private equity investments down 2% year over year through July. In North America, the decline is closer to 4%, as firms weigh higher valuations, integration complexity, and a cooler macroeconomic backdrop.
Still, specialty plays continue to draw attention. OPTIS data show private equity targeting cyber, environmental, and automation-related niches – areas where growth, expertise, and margins remain stronger than in traditional brokerage lines. In the first half of 2024 alone, PE investment in insurance reached $27 billion, already 42% higher than the total for all of 2023.
For now, though, that activity remains concentrated south of the border. Canada’s P&C market, steady and well capitalized, seems content to wait out the cycle – sitting on cash, not chasing deals.
