D&O market softening in Canada appears to be slowing down

Market softening in directors and officers (D&O) insurance in Canada seems to be slowing down, relative to the pricing opportunities still offered in cyber insurance lines, sources tell Canadian Underwriter.

For around two years, brokers and insurance company commercial underwriters have told CU that markets have been very soft in both D&O and cyber lines, with pricing not necessarily reflecting claims patterns in both lines of business.

Applied Systems Canada’s Commercial Lines Index shows the pace of average rate increases in business and professional service lines declined from 2.72% in 2024 Q4 to 1.83% in 2025 Q4.

A Marsh 2025 Q2 report shows cyber lines prices dropped 3%, led by rate decreases in excess layers anywhere between 3% and 10%.

But in the beginning of 2026, the pace of price decreases is starting to slow.

“We’re definitely seeing some continued opportunity to save some money in D&O,” Marc Major, managing director and global placement leader at Marsh Canada, tells CU. “On average, I think we were seeing around 5% reductions to close out the year in 2025.

“But that marketplace is starting to stabilize a lot more than, say, the cyber universe. I think that’s just given the drastic swings that we saw in price decreases over the past two years.”

Generally speaking, in the D&O market, the claims experience of Canadian private companies and publicly traded companies is less volatile than that of their U.S. or Australian counterparts, Major says.

“However, I think the pricing reductions have reached a certain impact that we’re not seeing the bigger, double-digit [decreases] anymore.”

Canadian brokers still have an opportunity to help clients take advantage of ongoing softening in cyber rates, he adds. That’s in part because clients and insurers are starting to get a better feel for how cyber insurance operates.

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As clients see it, “the activity and heightened sensitivity around cyber continues to be a focus,” Major says. And clients have made significant investments in cyber protection and different IT and software protections.”

And for cyber insurers, “we’re definitely seeing a marketplace in which insurers have got to know this space, are open to it, and want to compete for this business,” Major says. “And so we’ve seen some very competitive opportunities in the cyber space.

“I think the important distinction for cyber is: Is this the first time you’re buying it? Because we’re still seeing a large uptake in cyber here in Canada. And so, if it’s your first time buying it, you’re not going to notice the competitive environment. It’ll be new to you unless you’ve evaluated costs in prior years. But if you are renewing your cyber insurance program, you’re going to be able to take advantage of some softening pricing.”

Commercial property is another area of opportunity, following a comparatively ‘light’ year of natural catastrophe losses in Canada. Fresh off a record year of $9.1 billion in NatCat losses in 2024, Canada’s Cat losses reverted back to standard loss patterns in 2025, with just over $2.4 billion in losses last year.

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It appears commercial insurers have responded with offers of lower premiums to loss-free commercial property accounts.

“The property capacity market continues to be a very competitive environment,” Major says. “That’s partly because we had a very limited catastrophic loss year last year, and so reinsurance renewals have been very positive so far. That means capacity has opened up for these carriers and pricing has eased for these carriers.

“Given that there is still competition, property is one area where we are still seeing opportunity to drive price benefits for our consumers.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.