Canadian property and casualty insurance professionals will have to contend with commercial and personal lines market conditions diverging in stark contrast to one another. This 2026 dynamic is the continuation of a trend that emerged in 2025, but one that will test insurers and brokers alike.


On one hand, personal insurance in Canada will continue its hard market trajectory. Claims from the industry’s record-breaking natural catastrophe year in 2024 have still not fully flushed out of the system. Paired with massive inflation and auto regulations that require insurers to offer inadequate rates, personal lines will continue to see increased premiums and stricter underwriting standards.

In contrast, commercial insurance has softened faster and more drastically than many anticipated in Canada. Profitability in commercial insurance has led insurers to double down on pushing for growth on the commercial side of their ledger.

The further influx of additional capacity into the Canadian commercial insurance market has led to more competitive pricing and broader coverage options for businesses. This shift has resulted in challenges among insurers and brokers to retain clients. A new and different skill set is required to engage with clients during this new market dynamic.

In addition to facing market challenges, the insurance industry will also be affected by the introduction of generative artificial intelligence (AI).

When it comes to digital connectivity, the insurance industry has historically lagged other financial services. This will change as the insurance industry continues to catch up quickly with rapid evolution in data exchange.

Although its downstream results won’t be realized in 2026, AI will impact the future of insurance. It will bring more personalization of insurance offerings and broader distribution channels, including a significant uptick in embedded insurance offerings.

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