Entering 2025, the Canadian insurance market is marked by notable trends in both commercial and personal lines.
In commercial lines, the market is softening, with increased competition and capacity easing premium levels across several sectors. Businesses are benefitting from a more favourable environment, in which they can secure improved coverage terms and reduce costs after years of rising premiums.
Commercial brokers may see opportunities to attract new clients, as the soft market enables them to negotiate competitive pricing and enhanced coverage.
In personal lines, affordability remains a primary concern — especially in auto insurance. Factors like government legislation are affecting auto insurance premiums and policy conditions, while advanced vehicle technologies, supply chain disruptions and repair costs continue to drive rate pressures.
Regulatory efforts, particularly in Ontario and Alberta, continue to focus on containing premium growth, yet the underlying cost drivers persist. These pressures may prompt rate adjustments, pushing brokers to work closely with customers to find optimal coverage options within these constraints.
Climate change and extreme weather continue to increase the frequency of natural catastrophes, such as floods and wildfires, which will likely drive higher claims costs. This will prompt insurers to adjust premiums and coverage terms. Clients will be looking to their brokers to provide comprehensive risk management solutions.
In both personal and commercial lines, technology and data analytics are positioned to play a transformative role. Brokers are leveraging AI and data insights to better understand customer needs, predict risks and streamline processes, allowing more time for building relationships and offering proactive advisory services.
With a growing demand for digital service options, brokers are collaborating with insurers to enhance the ease of purchasing coverage and handling claims. This alignment with consumer expectations emphasizes the importance of providing a seamless, efficient experience.
To support growth, enable expansion and drive customer experience, it will be essential for brokerages to have a strong people strategy in place. The competition for skilled talent in the commercial sector underscores the need for strategic investments in attracting, developing, and retaining top professionals.
