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Commercial rate increases across the Canadian property and casualty (P&C) insurance industry were down in 2025 Q4 across all lines relative to premium renewals in the same quarter last year, according to Applied Systems’ latest Commercial Index.

Average year-over-year (5.02% in 2024 Q4 vs. 2.23% in 2025 Q4) and quarter-over-quarter renewal rates decreased across the most commonly placed commercial lines of business, Applied says in a press release Tuesday.

Notably, in the fourth quarter of 2025, the premium renewal rate change for hospitality services was 0.96%, down from the 2025 Q3 average of 2.33%, Applied reports. The 2025 Q4 average premium renewal rate change was also down compared to the same quarter last year, which was 3.79%.

It’s a far cry from the days of the COVID-19 pandemic, when concerns were raised about the availability and pricing of coverage for restaurants, bars, hotels and event venues.

In 2022, Joyce Radjadurai, then innovative and digital product practice leader for April Canada, told CU some Lloyd’s syndicates withdrew from the hospitality market. Slip-and-fall claims, sewer backup and a hard market pre-dating the pandemic were among the reasons it was difficult to find coverage for hospitality risks.

In the real estate property segment, the premium renewal rate change average was 1.68% for the quarter, down from the 2025 Q3 average of 2.41%.

For the business and professional service segment, the 2025 Q4 premium renewal rate change average was 1.83%, down from the 2025 Q3 average of 2.72%, Applied says.

Construction, erection and installation services saw a slight premium renewal rate change average of 2.52% for the latest quarter, down from the 2025 Q3 average of 2.81%.

Lastly, for retail services, the premium renewal rate change averaged 3.12%, down relative to the 2025 Q3 average of 3.90%.

“The market across all lines of business continues to soften, following a downward trend since the middle of 2024,” says Steve Whitelaw, Applied’s senior vice president and general manager, Canada. “These falling rates provide brokers the opportunity to engage with their customers to consider expanding coverage options and future-proof their businesses.”

Canada’s commercial lines market has been softening for a year or longer, and it’s anybody’s guess when that could end, panellists and audience members predicted during a CU webinar last November.

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Several suggested the current softening cycle in commercial lines appears likely to last until the end of this year, with 33% responding to a poll predicting it would last until at least 2027 Q2. Twenty-eight percent predicted it would last until the end of 2027, while 28% thought it would stick around only until the end of 2026. (More than 230 industry professionals attended the webinar.)

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Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.