In Canada, an insurance broker is a professional who has a license to sell insurance on behalf of insurance companies to individuals and businesses. Insurance brokers get paid to match insurance buyers with insurance sellers.
Canadian insurance brokers are controlled by provincial insurance regulators who set rules on who can sell insurance, what types of exams are required to sell different types of insurance and what levels of licensing are required for various roles in the insurance industry.
In summary, an insurance broker is a regulated middleman who helps connect people with the right insurance company policies for their needs.
What does an insurance broker do in Canada?
Insurance brokers are able to sell insurance policies and provide advice on a number of different types of insurance including:
- Life insurance
- Car insurance
- Health insurance
- Property insurance
- Mortgage insurance
- Business insurance
- Travel insurance
In addition, insurance brokers specialize in property insurance (home/car/valuables) while others specialize in areas like business insurance or health insurance.
Insurance brokers are different than insurance agents. An insurance broker works with multiple insurance companies and an insurance agent represents one (sometimes more) insurance companies under contract.
Insurance broker benefits
When you use an insurance broker you are getting access to a highly trained professional who can help you understand the types of insurance you need as well as compare quotes from multiple insurance companies in order to find you the cheapest insurance.
Insurance brokers are also helpful in dealing with insurance claims. Brokers are supposed to work with their clients and advocate for them in the unfortunate event in which a claim is made.
Insurance broker disadvantages
You will likely pay more for the same insurance policy offered through an insurance broker than you would by getting that policy directly from an insurance company.
Why is that you ask?
Because, insurance brokers need to be compensated for their time and their knowledge!
Also, you might find that your insurance broker is great in one area of expertise (auto insurance) but cannot offer another type of insurance (travel insurance). In this case you would have to spend more of your own time either searching for a policy or finding another insurance broker to help you.
Canadian insurance companies
Here is a list of the 15 top (non-bank) insurance companies in Canada:
- Manulife Financial Corporation
- Great-West Lifeco
- Desjardins Insurance
- Sun Life Financial
- Fairfax Financial
- iA Financial
- Intact Financial
- E-L Financial
- La Capitale
- The Co-operators Group
- Aviva Canada
- Ivari
- RGA Life Reinsurance
- Wawanesa Mutual Insurance Company
- Swiss Reinsurance Company
These insurance companies collectively manage trillions of dollars of assets collected in the form of insurance premiums. Insurance companies make money by balancing the cost of insurance premiums and the returns generated by investing those premiums (assets) against all insurance proceeds or claims paid out to policyholders (liabilities).
Online insurance brokers
The industry has developed and now there are a number of online insurance brokers who can provide insurance quotes on almost all types of insurance. Some of these companies include:
Canadian banks
Canadian banks can also offer insurance but the types of insurance they can sell are limited to:
- Credit card insurance
- Creditors’ disability insurance
- Creditors’ life insurance
- Creditors’ disability insurance
- Creditors’ employment insurance
- Creditors’ vehicle inventory insurance
- Export credit insurance
- Mortgage insurance
- Travel insurance
In addition, most Canadian banks either have subsidies or partnerships which allow them to offer other types of insurance like home and auto insurance.
What is the best insurance broker in Canada?
It is best to look at insurance brokers at a city and province level because insurance is regulated by provincial institutions.
Here are some useful resources for you to check out:
- Toronto insurance brokers
- Ottawa insurance brokers
- Edmonton insurance brokers
- Calgary insurance brokers
- Winnipeg insurance brokers
- Vancouver insurance brokers
- Montreal insurance brokers
Remember, insurance brokers are advisors and intermediaries for you to use in order to access insurance from actual insurance companies who write the insurance policies. You can always go direct to one of these companies.
How much do insurance brokers make in Canada?
According to Indeed.com the average base salary for a mortgage broker in Canada is $50,804.
Insurance brokers work with a group of insurance professionals at an insurance brokerage and can make a lot more than the average salary by selling more policies. Insurance companies will pay insurance brokers a commision which is a percentage of the insurance premium you pay.
Intact Insurance notes that standard commissions range from 5%-30% depending on the type of insurance you get.
Considering the average Canadian household pays thousands of dollars per year in insurance premiums, an insurance broker can be a very lucrative career! The median insurance brokerage managers make upwards of $100,000 per year and is one of the top high-paying jobs in Canada!