The insurance industry in Canada provides people with security when faced with unexpected events such as accidents, illness, or theft. It also makes an important contribution to the Canadian economy and offers employment to many Canadians.

In this article, we explore the statistics around the insurance industry in Canada, including the largest Canadian insurance companies, the market share of different lines of insurance, and the average costs of different types of insurance in Canada.

Insurance Industry Statistics for Canadians

  • Canada ranks ninth in the world for the total value of written insurance premiums.
  • Life insurance premiums account for over half of Canadian insurance premiums.
  • Manulife Financial is the largest insurance company in Canada, with nearly $920 billion in assets.
  • The insurance industry employs around 166,000 people in Canada.
  • Around 26 million Canadians have supplementary health insurance, and 22 million have life insurance.
  • Monthly payments for life insurance range from $17 to over 300 depending on a range of factors.
  • The most expensive car insurance is in British Columbia, followed by Ontario and Alberta.
  • The average cost of home insurance is around $80 per month.

The Insurance Industry in Canada Overview

The insurance offered by the Canadian insurance industry can be divided into two main categories: life insurance and non-life insurance. Having life insurance means that a chosen beneficiary will get a lump sum if the policyholder dies or gets terminally ill. The non-life category includes all other types of insurance such as your car, home, and property insurance.

When a person takes out insurance, the insurance company agrees to pay out benefits as agreed in the policy in exchange for a regular payment, known as a premium. In 2021, Canada was ranked number nine in the world based on the value of written premiums. The US has the highest value of written insurance premiums in the world, followed by China.

In Canada, some insurances are compulsory. One of them is car insurance if you own a car and use it on public roads. Another is the workers’ compensation insurance where employers take out insurance in case a worker becomes ill or is injured at work. Since Canada has universal health care, having health insurance is not compulsory in Canada, however, Canadians contribute towards it through their taxes.

Other insurances, including life insurance, home insurance, and business insurance, are not compulsory. However, they may be required by, for example, landlords or lenders in certain circumstances.

How is the Market Divided Between Types of Insurance?

Within the Canadian insurance industry, life insurance premiums account for 55% and non-life insurance premiums for 45% of the total premiums. Motor vehicle insurances form the largest sub-sector within the non-life insurance premiums with a 42% share, followed by home insurance premiums at 34%

Insurance Industry Leaders in Canada

In terms of total assets, the industry leader in Canada is Manulife Financial. In 2021, the company’s assets were $917.6 billion according to Insurance Business and the value of gross written premiums was $44.3 billion. As well as operating in Canada, the company also has offices in Europe and Asia and operates as John Hancock in the United States. The company served more than 33 million customers at the end of 2021.

Next on the list is Great-West Lifeco, with total assets of $630.5 billion and a total gross written premium value of $57.4 billion. They also have offices in Europe and the United States as well as in Canada and serve over 33 million policyholders.

The group of top three insurance companies in Canada is completed by Desjardins. The company has $11.6 billion worth of gross written premiums and holds assets worth $397.1 billion. It is North America’s largest federation of credit unions providing financial as well as insurance services.

The Canadian Insurance Industry is a Significant Employer

The insurance industry employs around 166,000 people in Canada. However, like many other industries, the insurance sector is facing staff shortages. This is making it more challenging to find and retain members of staff. Reasons behind the issues include the aging workforce as well as the increased competition among the over 150 insurance providers in Canada.

Insurance Industry Pay

There are several different roles within the insurance industry including insurance advisor, underwriter, insurance broker, and actuary. According to the recruitment site Indeed, the average salary for an insurance advisor is $50,432, for an underwriter $60,180, insurance broker $49,705, and actuary $81,816. The actual salaries vary depending on factors such as location and level of experience.

Life and Health Insurance in Canada

Since Canada has universal healthcare, this is reflected in the number of Canadians who have supplementary health insurance. According to Statista, approximately 26 million Canadians have health insurance and 22 million have life insurance.

Around 57% of Canadians feel they do not have enough coverage to meet all their needs in unexpected circumstances. In addition, less than 30% of Canadians responding to a global consumer survey by Statista, felt they were well informed about their insurance and what options they have for protecting themselves and loved ones in the event of an accident, long-term illness, or death.

82% of life insurance policies in Canada are purchased privately through an advisor or an agent, the remaining 18% are plans that are secured by employers. In 2020, according to CLHIA, the average protection per household from life insurance was $422,000.

In 2019, life and health insurers in Canada paid out $103 billion in benefits. The majority, $53.3 billion were paid out as retirement annuity payments. $38.1 billion were paid to policyholders in health benefits and life insurance benefits amounted to $12.1 billion.

How Much Does a Life Insurance Cost in Canada?

How much life insurance will cost depends on a range of factors, such as your age, your health, and what type of life insurance you choose. According to MoneySense, you can get a ten-year term life insurance from $17 a month or $193 per year if you are a healthy 35-year-old female and from $23 per month or $259 per year if you are male.

For just over $100 more per year, you can get a twenty-year term life insurance. If you were looking for insurance that covers you for your whole lifetime, it costs around $287 for women and $338 for men.

Why Higher Premiums for Men

Men in Canada are likely to have to pay more for their life insurance than women. The reason behind this is that women have a longer life expectancy than men. While women currently have a life expectancy of 84 years, it is 80 for men.

Because of this difference, life insurance companies calculate that they are more likely to pay out claims on policies taken out by men sooner than on those taken out by women. Therefore, the premiums tend to be higher for men to balance out the higher risk.

How Much Does Health Insurance Cost in Canada?

Canada’s universal health care system covers most medical needs and costs. While the public health care system will cover the costs of most regular health care and emergency medical services, it generally will not cover most dental services or medication if it is not provided by a doctor.

Private health insurance will offer different types of coverage and it is important to consider both current and possible future needs when taking out additional health insurance. Private health insurance may cover costs such as dental care, physiotherapy, and prescription medication.

According to Rate Hub, an 18-year-old taking out health insurance in Canada, can expect premiums between $82.55 and $91.30. The premiums stay the same until the forties when health insurance will cost between $97.18 and $107.48.

From there on, they go up every decade and people in their sixties will be looking at payments between $100.07 and $110.67. Of course, there are likely to be premiums that are both cheaper and more expensive than the examples here since the cost is dependent on so many factors, including location and coverage required as well as the policyholder’s age.

Car Insurance in Canada

In Canada, having car insurance is mandatory to protect you financially in the event of an accident. Additionally, it will protect you if your car is damaged or stolen. 26.2 million motor vehicles were registered in Canada in 2021, a 1.9% increase since the previous year.

According to the Insurance Bureau of Canada, private insurers in Canada paid $17.1 billion in 2021 in direct claims across all types of motor vehicle insurance coverage. These payouts accounted for 38.5% of all direct claims and the vast majority of them, at 83.7%, involved private passenger vehicles.

How Much Does Car Insurance Cost in Canada?

Like any other insurance, the cost of car insurance depends on several factors including the age of the driver, the type of car, the purpose the car is used for, and where you live. The average cost across the country in 2019 was $1,142. However, there are huge differences across the provinces and territories.

The highest premiums were in British Columbia, where car insurance cost $1,832 on average. It was followed by Ontario and Alberta with $1,515 and $1,316. The cheapest insurances are in Quebec where an annual car insurance costs $717 on average.

Home and Tenants Insurance

While home insurance is not compulsory in Canada, most lenders will require proof of insurance as security for a mortgage or loan. Home insurance will cover not just the residential building, but also the contents and any outbuildings, too. Insurances for tenants will protect the tenant’s personal belongings in case of, for example, theft.

Insurers in Canada wrote $16.2 billion worth of direct premiums in 2021 for personal property insurance. In the same year, $7.6 billion was paid out for incurred direct claims. The average home insurance is around $80 per month and a tenant’s insurance is £23 per month. However, the cost will vary depending on the location, type, and size of the property, and contents to be insured.

Frequency of Catastrophic Losses is Increasing

The insurance industry uses the term catastrophic when losses related to a disaster total $30 million or over. In Canada, catastrophic losses caused by natural disasters such as severe storms, flooding, and wildfires are occurring far more frequently now than they did in the eighties.

The highest catastrophic loss in a single year so far was in 2016 when they amounted to $5.6 billion. $4.1 billion was caused by a single event, which was the Fort McMurray wildfire in Alberta that resulted in approximately 60,000 claims. The previous record of $3.6 billion was from 2013, with $2.9 billion being caused by flooding in Alberta and Toronto.

Conclusion

The insurance industry in Canada has grown rapidly over the last two decades and the assets held by leading insurance companies amount to hundreds of billions. There are over 150 private insurance companies in Canada providing Canadians with life and non-life insurance.

While the insurance industry’s growth looks set to continue, there are some challenges facing the industry. These include a shortage of staff and an increased number of catastrophic losses per year.

Frequently Asked Questions

The insurance industry employs around 166,000 people in Canada in various roles.

The most common insurance types include motor vehicle insurance, which is compulsory, life insurance, health insurance, and home insurance.

The cost of life insurance starts from around $17 per month but can cost over $300 per month. The cost depends on a range of factors, including the policyholder’s age and health and the term of the insurance policy.

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