2 reasons why Canada’s commercial brokers are drawn to the mid-market

Competition appears to be particularly intense in the commercial mid-market space, where capacity is reportedly abundant, Canadian P&C insurance industry professionals tell Canadian Underwriter. And yet, the spoils tend to go to business clients who can show how they’ve reduced their risks.

For brokers, the commercial mid-market seems to be the “sweet spot” for growth.

“I think one of the reasons why everybody is fairly focused on the mid-market is because of two dynamics that I’ve seen,” says Matthew Studley, Hub International’s chief operating officer for the Ontario and Atlantic regions.

“Typically, with a mid-market client, you don’t have the same level of client-focused risk management infrastructure [as you would with larger accounts],” he tells Canadian Underwriter during an interview about Canada’s specialty lines markets. “Often, mid-market clients don’t have a risk manager on staff. It’s a CFO, a general counsel, or a CEO who’s doing it kind of off the side of their desk.”

Plus, as the accounts get larger, the number of brokerages capable of providing commensurate service levels starts to dwindle. For example, a brokerage needs more staff and resources to service multiple lines of insurance, as required. Plus, larger clients may be looking into opportunities outside of Canada, requiring international expertise.

“It’s just not the same opportunity,” Studley says of the difference between the large and mid-market commercial space.

Also, the mid-market offers brokers an opportunity for quicker growth.

For example, the larger the company, the more developed and complex its risk management processes will typically be. This leads to the broker spending more time with the clients’ various risk experts, and possibly having to arrange coverage across multiple lines. 

“The sales cycle for mid-market is much shorter than it is for risk management,” Studley says. “When you get into the traditional risk management — for example, large, publicly-traded firms — there are a lot of eyeballs on those decisions.

“And so, you’re typically looking at a sales cycle of three to five years to move those accounts, assuming you can do everything the current broker can do.”

It doesn’t hurt there are more commercial insurance options available these days, thanks to the current softening rate cycle. Overall, commercial insurance rates in Canada dropped 3% in 2025 Q1, as Marsh observes in its report, Canada Insurance Market Rates. Cyber lines led the way with a 6% decrease during the quarter.  

That said, commercial underwriters tend to award the more favourable rates, terms, and conditions to clients with loss-free accounts.

Early this year, WTW reported seeing the U.S. middle market splitting in two.

“A bifurcated market is expected to persist, with favourable business classes benefiting from increased competition and new market entrants, while high-risk accounts must differentiate themselves to mitigate premium costs,” as WTW states in its report, Insurance Marketplace Realities 2025 Spring Update – Middle Market.

Similar observations have been made of Canada’s middle market, although capacity in most Canadian markets appears to be abundant, sources tell CU.