Canadian businesses entering 2027 are facing generally favourable property and casualty insurance conditions, with strong insurer capital and increased competition helping keep prices flat or lower for companies with strong risk records, according to a new report from Aon.
The global professional services firm’s Canadian Insurance Market Update for Fall 2026 says ample insurance capacity and healthy insurer and reinsurer results are supporting improved conditions across much of the market, giving businesses more options to adjust coverage and insurance programs.
However, the report warns that increasingly volatile catastrophe risks, cyber threats, supply chain pressures and geopolitical tensions continue to complicate the risk environment for companies.
"For Canadian buyers, this backdrop has translated into a domestic market that is generally very favourable," said Russell Quilley, head of commercial risk and chief broking officer for Canada at Aon. "Capacity is ample, competition among insurers and reinsurers is strong, and pricing for well‑performing risks is flat to down across many lines. Buyers have more options to enhance coverage and restructure programs, but they are doing so against a risk landscape that is more interconnected, volatile and difficult to predict than ever."
Catastrophe risks shape underwriting
The Canadian property and casualty insurance market remains well-capitalized, with competition among insurers supporting favourable conditions for businesses that demonstrate effective risk management, Aon said.
At the same time, insurers are paying greater attention to catastrophe exposures, including wildfires, floods and severe convective storms, which the report says are emerging more frequently. Underwriters are placing increased emphasis on the quality of risk data, property valuations and evidence of mitigation measures as they assess coverage.
For businesses seeking property insurance, the report says improving market conditions have brought increased capacity, broader coverage options, higher limits and greater flexibility for well-managed risks. Catastrophe exposure remains a key consideration in underwriting decisions, making accurate property valuations and demonstrated risk mitigation increasingly important.
The report does not suggest that all businesses will experience the same conditions, noting that the market's favourable position is particularly relevant to risks with strong performance and risk-management practices.
Liability and specialty coverage remain competitive
Casualty and specialty insurance markets continue to benefit from strong balance sheets and competition, according to Aon. However, social inflation and litigation trends remain concerns, particularly for businesses with exposures in the United States.
The report points to strong risk controls, clear contract language and a company's loss history as increasingly important considerations for businesses seeking coverage.
Social inflation, which can include rising claims costs associated with litigation and larger awards, remains one of the factors contributing to uncertainty in the casualty market. Businesses with U.S. exposures may face particular scrutiny as insurers assess potential liability risks.
Cyber threats, supply chain pressures and geopolitical tensions also remain sources of volatility across the broader property and casualty market, despite the availability of insurance capacity.
Businesses urged to focus on risk information
Aon’s findings indicate that companies may have opportunities to review existing insurance arrangements as competition among insurers creates greater flexibility for well-performing risks. Businesses may be able to consider changes to coverage, limits and program structures as they prepare for the coming year.
However, the report's emphasis on data quality, valuations and mitigation suggests that companies' ability to demonstrate their risk-management practices remains an important factor in underwriting assessments.
For property owners, this includes maintaining current valuations and documenting measures to reduce exposure to severe weather and other catastrophe risks. For companies seeking casualty or specialty coverage, loss records, contractual protections and controls addressing liability exposures remain important considerations.
The market outlook entering 2027 is therefore broadly favourable for businesses with well-managed risks, but the report highlights that insurance buyers must continue to account for an increasingly complex and unpredictable risk environment.