InsurEconomy 2024

Measuring the value of the property and casualty insurance industry to the economy

CANADA

IB C
Insurance Bureau
of Canada
 InsurEconomy 2024
The InsurEconomy report is published by Insurance Bureau of Canada (IBC) and presents statistics on the P&C insurance industry’s
importance and economic contribution to Canada and its provinces. Data in the report is sourced from IBC, Statistics Canada and
MSA Research Inc., with other supporting information collected from secondary sources.

IBC commissioned Statistics Canada to use their input-output model to simulate the P&C insurance industry’s 2022 direct, indirect and
induced impacts on output and employment at the national and provincial levels. IBC provided the 2022 estimate of P&C insurance
industry output used in the model shocks.

The most recent data available is used for the major P&C issues highlighted within the report.

In some instances, figures may not add up to the listed total due to rounding.

InsurEconomy 2024 – CANADA 2

Contents
Chapter 1: Key Findings Chapter 6: Commercial Insurance

Chapter 2: An Overview of P&C Insurance Chapter 7: Major P&C Issues

Chapter 3: The Importance of the P&C Insurance Auto Theft

Industry for Canada National Flood Insurance
Revenue Allocation across Canada (2013-2022) Chapter 8: Secondary Functions and Societal Benefits of the
Revenue Allocation across Canada (2022) Insurance Industry
Investment in Government Bonds Financial Loss Minimizer

Chapter 4: Employment Contributions Financial First Responder

Capital Provider and Supporter of Public Finance
Jobs
Innovation Facilitation
Labour Income
Commercial Credit Facilitator
Diversity
Reputation Protector
Chapter 5: Economic Contributions
Capital Formation Enabler
Gross Domestic Product Workplace Safety Promoter
Tax Revenue
Appendix: Classification of Industry Groups and Methodology

InsurEconomy 2024 – CANADA 3

Chapter 1: Key Findings
In 2022, Canada’s property and casualty (P&C) insurance The insurance industry furthers gender equality by
industry directly contributed almost $22 billion to the employing a substantial percentage of women. As of
country’s nominal gross domestic product (GDP), with 2021, L&H and P&C insurance brokerages achieved a
a total economic impact of more than $38 billion when 60% rate of employment for women and carriers
indirect supply chain purchases and the induced impact registered 61%, compared with 48% for the average
of re-spending are taken into account. industry in Canada (Exhibit 3).

In Canada, P&C insurance carriers and brokerages directly The P&C insurance industry contributes substantially
created 145,000 jobs in 2022. For every 100 P&C insurance to Canada’s tax revenue. In 2022, the industry directly
jobs, a further 105 jobs were generated due to supply contributed nearly $4 billion in federal taxes (Exhibit 5)
chain impacts and the multiplier effect of employees’ and more than $8 billion in provincial taxes and levies,
re-spending of earnings. The total number of jobs which brought the industry’s total tax contribution to a
attributable to the P&C insurance industry was estimated slightly more than $12 billion.
to be 297,000.

Those working for life and health (L&H) and P&C insurance
carriers in Canada in 2022 earned an hourly compensation
that was 34% above the national average (Exhibit 2),
reflecting their productivity. On average, labour
productivity at an insurance carrier was 84% higher than
at the average industry in Canada (Exhibit 4).

InsurEconomy 2024 – CANADA 4

Chapter 2: An Overview of P&C Insurance
The P&C insurance industry transfers risks away from individuals Within the P&C insurance industry, reinsurance companies provide
and businesses. Insurers accomplish this by pooling and spreading risk transfer services to primary insurance carriers. Similar to how
individual and business risks among a wide range of perils, businesses insurers pool risks from individuals and businesses, reinsurance
and individuals. Insurers price policies to match the expected value companies pool risks from insurers. By using reinsurance contracts,
of the risk, administrative costs and a profit margin. By constructing a primary insurance carriers can transfer risk for certain policies to the
large, diversified portfolio of these risks, the industry manages reinsurer and meet obligations for capital adequacy that are set by
P&C risks in Canada. government regulators.

However, primary insurance carriers do not work in isolation. Although the nature of the P&C insurance industry remains relatively
Insurance carriers depend on the distribution channels and consumer stable over time, and despite the challenges with natural catastrophes
education services of insurance brokerages and agents. Brokers and over the last few years, the business strategy continues to evolve to
agents work directly with consumers to select insurance coverages reflect the changing risk and regulatory environment in which the
that most accurately match the consumer’s budget and risk profile. industry operates.

InsurEconomy 2024 – CANADA 5

Chapter 3: The Importance of the P&C Insurance Industry
for Canada
The P&C insurance industry in Canada expertly fulfills its role of Revenue Allocation across Canada (2013-2022)
transferring and managing the risks of individuals and businesses. Every dollar of revenue that Canadian P&C insurance carriers generate
These risk transfer and management services generate revenue is typically allocated as illustrated in Exhibit 1. For the 2013–2022
and simultaneously spur investment. Beyond the economic impact, period, claims paid out to policyholders, on average, made up the
the industry provides secondary functions and societal benefits to largest allocation (55%) of the P&C insurance industry’s revenue in
Canadian society which are explained in further detail in Chapter 8. Canada, with the profit margin accounting for the smallest allotment
(9.2%), on average. Overall, each insurer assumes and manages the risk
of its clients in exchange for a premium that covers claims, operating
expenses and other obligations.

Exhibit 1: P&C Insurance Carrier Revenue Allocation, 2013–2022, Canada

21.7%
14.1%
4.6%
9.2%

4.7%
55%

Operating expenses including employee compensation Investment Profit Source: IBC analysis
with data from MSA
Taxes and Levies Underwriting Profit
Research Inc. (Based
Profit Margin on 10-year average)
Claims paid to policyholders

InsurEconomy 2024 – CANADA 6

Revenue Allocation across Canada (2022) industry’s profit margin is almost exclusively underwriting
In 2022, the P&C insurance industry paid out 48% of its revenue income, although investment income would traditionally
directly to claimants, when compared to the average allocation of make up approximately half of the industry’s profit.
55% over the last 10 years (Table 1). In the same year, the industry By fulfilling its risk transfer function, the P&C insurance industry
retained 14% of revenue as profit, which was significantly higher than contributes significantly to Canada’s competitiveness and prosperity.
the recent 10-year average of 9.2%. The higher-than-normal profit The industry offers a relatively high remuneration to its very
reflected a decline in claims frequency and severity because of the productive and diverse workforce, while contributing a substantial
downturn in economic activity during the COVID-19 pandemic. This amount in taxes to municipal, provincial and federal governments.
underwriting profit will likely not stay at this level, given inflation and
claims trends. Concurrently, the deterioration in investment returns In addition to the direct economic contribution of the P&C insurance
reflected the sharp increase in interest rates and the resulting mark-to- industry, there are also indirect and induced impacts.1 Indirect
market losses on most invested assets of P&C insurers, specifically as impact captures the upstream supply chain activity of intermediate
it related to unrealized losses from bonds and equities. Currently, the inputs to the industry. The induced impact captures economic
activity attributable to the wages of workers in the industry and its
supply chain.
Table 1: P&C Insurance Carrier Revenue Allocation, 2022,
Canada Investment in Government Bonds
The P&C insurance industry invests heavily in government bonds that
supports Canada’s economy. In 2022, the P&C insurance industry held
Allocation % of Revenue
a total of almost $39 billion in federal, provincial, municipal, public
Claims Paid to Policyholders 47.7% authority and school bonds. This level of investment in government
Operating Expenses 22.4% bonds in 2022 was marginally higher than the $34 billion in 2018.

Taxes and Levies 15.7%

Profit Margin 14.3%
Underwriting Profit 14.1%
Investment profit 0.2%

Source: IBC analysis with data from MSA Research Inc.

1
Statistics Canada. (2009). User’s Guide to the Canadian Input-Output Model.

InsurEconomy 2024 – CANADA 7

Chapter 4: Employment Contributions
Jobs Labour Income
Across Canada, P&C insurers directly employed 70,000 workers in The insurance industry is not only a major source of employment
2022. Including brokerages, which act as expert advisors to address in Canada, it also supports high-quality, high-paying jobs. In 2022,
consumer insurance needs, the industry’s direct contribution to the workers at L&H and P&C insurance carriers made an average of
employment market reached almost 145,000 workers.2 $59 per hour, and workers at L&H and P&C insurance brokerages
earned an average of $52 per hour. These average hourly wages were
The broad P&C insurance industry is responsible for substantially more
significantly more per hour than Canada’s average employee at
jobs than just its direct employees. These indirect and induced jobs
$44 per hour (Exhibit 2).
include occupations in a wide variety of areas such as legal services,
accounting, telecommunications, data processing and motor vehicle In 2022, Canada’s P&C insurance industry employees at carriers
repair services. Accounting for the indirect jobs resulting from supply and brokerages earned $12 billion. Accounting for the indirect jobs
chain activity and induced jobs generated through employees generated through the supply chain impacts and the multiplier effect
re-spending their earnings, an additional 152,000 jobs were created of employees re-spending their earnings, added an additional
in 2022, which brought the total employment attributable to the P&C $9 billion in compensation, which brought the total labour income to a
insurance industry up to 297,000 workers. little more than $21 billion. The multiplier effect refers to the effect on
the national income and product of an exogenous increase in demand.
The investment of the P&C insurance industry leads to increased
demand and consumption in other parts of the Canadian economy.

2
See Appendix for the methodology used by Statistics Canada to compute the direct, indirect and induced impacts.

InsurEconomy 2024 – CANADA 8

 Exhibit 2: Total Compensation Per Hour Worked by Industry, 2022, Canada

Utilities
Mining and oil and gas extraction
[52] Finance and insurance
[5241] Insurance carriers
Information and cultural industries
Holding companies
[5242] Agencies, brokerages and other insurance related activities
Professional, scientific and technical services
Wholesale trade
Manufacturing
Construction
All industries
Real estate, rental and leasing
Transportation and warehousing
Health care and social assistance
Administrative and support, waste management and remediation services
Arts, entertainment and recreation
Retail trade
Educational services
Other private services
Accommodation and food services
Agriculture, forestry, fishing and hunting
0 10 20 30 40 50 60 70 80
Dollars Per Hour, 2022
Source: Statistics Canada.
Note: See Appendix for 2022 North American Industry Classification System

InsurEconomy 2024 – CANADA 9

Diversity
The 2021 Canadian census revealed that Canada’s finance and insurance industry employed more women (56%) than men (Exhibit 3).
L&H and P&C insurance brokerages employed 60% women and carriers employed 61%, both higher than the average industry in Canada (48%).

Exhibit 3: Employment by Industry by Gender, 2021, Canada

All industries
Health care and social assistance
Educational services
(5241) Insurance carriers
(5242) Agencies, brokerages and other insurance related activities
(52) Finance and insurance
Accommodation and food services
Management of companies and enterprises
Retail trade
Other services (except public administration)
Public administration
Arts, entertainment and recreation
Real estate and rental and leasing
Professional, scientific and technical services
Administrative and support, waste management and remediation services
Information and cultural industries
Wholesale trade
Agriculture, forestry, fishing and hunting
Manufacturing
Utilities
Transportation and warehousing
Mining, quarrying, and oil and gas extraction
Construction
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Women Men
Source: Statistics Canada.
Note: See Appendix for 2022 North American Industry Classification System

The P&C insurance industry supports a significant number of jobs, employs a significant percentage of women and pays above-average wages,
all of which contribute to both the economic dynamism of the country and its gender equality.

InsurEconomy 2024 – CANADA 10

Chapter 5: Economic Contributions
Gross Domestic Product
In 2022, the P&C insurance industry directly added $14 billion to In addition to the P&C insurance industry’s large overall contribution
Canada’s GDP through a combination of its risk transferring services to Canada’s economy, the labour productivity (measured as real
and the return on its investment activities. P&C insurance brokerages GDP per hour worked) of insurance carriers was 84% above the 2022
added more than $7 billion in GDP, which brought the industry’s total national average. This makes employees at L&H and P&C insurance
direct contribution to Canada’s economy to nearly $22 billion. carriers among Canada’s most productive workers (Exhibit 4).

The P&C insurance industry’s operations indirectly create goods and

services in its supply chain and, through employees re-spending
their earnings, induce additional activities across the economy, which
contributed a further $17 billion to Canada’s GDP in 2022. Overall, for
2022, the cumulative direct, indirect and induced impact of the P&C
insurance industry’s contribution to Canada’s GDP was more than
$38 billion.

InsurEconomy 2024 – CANADA 11

 Exhibit 4: Labour Productivity Per Hour by Industry, 2022, Canada

Utilities
Mining and oil and gas extraction
Real estate, rental and leasing
[5241] Insurance carriers
Information and cultural industries
[52] Finance and insurance
Wholesale trade
Manufacturing
[5242] Agencies, brokerages and other insurance related activities
All industries
Agriculture, forestry, fishing and hunting
Professional, scientific and technical services
Construction
Health care and social assistance
Transportation and warehousing
Administrative and support, waste management and remediation services
Retail trade
Educational services
Arts, entertainment and recreation
Holding companies
Other private services
Accommodation and food services
0 50 100 150 200 250
Real GDP per Hour Worked ($)
Source: Statistics Canada.
Note: See Appendix for 2022 North American Industry Classification System

InsurEconomy 2024 – CANADA 12

Tax Revenue
The P&C insurance industry contributed $248 million in provincial The P&C insurance industry also contributed federal
corporate income taxes across Canada and nearly $3 billion in government tax revenue. In 2022, P&C insurers across Canada
insurance premium taxes in 2022 (Exhibit 5). The industry contributed contributed almost $4 billion in taxes to the federal government.
an additional $5 billion in taxes and levies through its business These payments included corporate income taxes ($0.4 billion) and
operations, which brought the total tax revenue contribution to payroll taxes for the industry’s employees ($2 billion).
provincial governments to more than $8 billion. In 2022, the largest
Including both federal and provincial governments, the P&C insurance
direct sources of provincial taxes throughout Canada were retail sales
industry contributed more than $12 billion in taxes in Canada in 2022.
taxes and insurance premium taxes.

Exhibit 5: Taxes Contributed by the P&C Insurance Industry to the Provincial Governments, 2022, Canada

$341M
$280M
$308M
$248M Insurance Premium Taxes
RST on Premiums
Taxes on Claims
$2.8B Corporate Income Taxes
$1.6B Taxes on Operations
Payroll Tax
Health Care Levies

$3.0B B – billions
M – millions

Source: IBC

InsurEconomy 2024 – CANADA 13

Chapter 6: Commercial Insurance
According to 2022 estimates, Canada’s commercial insurance sector These payouts played a pivotal role in supporting businesses,
provided substantial value to Canada’s economy by contributing to enabling them to recuperate from their losses and swiftly restart their
GDP, labour income and job creation. The sector’s activities generated operations following unforeseen events. By providing the necessary
a direct economic impact of more than $8 billion in GDP, nearly financial support, the commercial insurance sector continues to be
$5 billion in labour income and 56,000 jobs. a crucial partner in the recovery and resilience of businesses across
Canada.
When factoring in the multiplier effect, each $100 of GDP and $100
of labour income in the sector generated an additional $75 and The ability of Canada’s P&C insurance industry to act as a financial
$75, respectively, in other industries. Similarly, the sector created shock absorber is heightened in challenging times like today, as
105 jobs for every 100 jobs in the commercial insurance sector in businesses feel the impact of an inflationary environment and periods
Canada. This brought the total economic impact of the commercial of lower economic growth, illustrated most plainly by price shocks
insurance sector in 2022 to nearly $15 billion in GDP, more than and the subsequent cost-of-living crisis. In such a landscape, insurers
$8 billion in labour income and 115,000 jobs. These trends highlight have a unique perspective and, indeed, a responsibility to absorb the
the significant economic impact and job creation potential of the impact for consumers and the wider economy.
commercial insurance sector in Canada.
At the end of 2022, over 930,000 businesses were active in Canada.3
Moreover, during the 2022 fiscal year, insurers in Canada disbursed All have one thing in common: without the right insurance coverage,
more than $13 billion to help settle commercial insurance claims. each could be wiped out by a disaster or lawsuit.

3
Statistics Canada.

InsurEconomy 2024 – CANADA 14

Chapter 7: Major P&C Issues
Auto Theft
Across Canada, the number of vehicle thefts has been increasing Most stolen vehicles are either shipped overseas, fraudulently have
rapidly. The federal government held an auto theft summit on their identification marking changed (also known as being “reVINed”)
February 8, 2024. The summit brought together leaders and or are disassembled for parts.5 Ontario has been hit the hardest in the
key stakeholders to discuss a coordinated response to the issue. country for auto thefts. Between 2018 and 2023, auto theft losses have
Participants at the summit endorsed a Statement of Intent on increased by 524%. In 2023, auto theft losses surpassed $1 billion in
combating auto theft and are working to finalize an action plan. direct claims costs for private passenger vehicles alone (this excludes
commercial vehicles and cargo) for the first time ever.
On February 21, the federal government announced a $15 million
investment to support law enforcement agencies’ work to combat IBC believes that Canada needs a whole-of-society approach to
auto theft. This investment will be geared toward: address auto theft that includes all orders of government, law
enforcement, auto manufacturers and insurers. IBC has advocated for
Increasing provincial, territorial and municipal police forces’
auto manufacturers to equip vehicles with anti-theft safety devices
capacity to take custody of detained vehicles from Canada
and update the current anti-theft safety standard. The majority
Boarder Services Agency
of stolen vehicles are 2019 or newer models, so addressing the
IEnhancing information-sharing and investigative tactics to issue at the source could have an immense benefit for the country.
identify and retrieve stolen vehicles and parts Additionally, IBC has advocated for insurers to educate consumers
IFurther engaging a coordinated response with domestic and about auto theft and that vehicles that are at a higher risk of theft
international partners on the issue. have higher insurance costs.6 At the provincial level, IBC has called
for reforms that would close the loopholes in the vehicle registration
Canada’s auto theft crisis is showing no signs of slowing down. In process that criminals exploit to reVIN stolen vehicles and sell them to
2023, the cost of insurance claims for replacing stolen vehicles in unsuspecting consumers. This includes vehicle identification number
Canada skyrocketed to a record-breaking $1.5 billion. This marks the inspection and registration reform across multiple provinces and
second year in a row auto theft claims costs have topped $1 billion. more resources devoted to this issue.
To put this into perspective, between 2018 and 2021, auto theft claims
costs averaged $556 million annually.4

4
Statistics Canada.
5
IBC and Équité. (2023). Auto Theft: A National Crisis. auto-theft-public-policy-position-paper.pdf (storyblok.com)
6
Équité. Top 10 Most Stolen Vehicles. Canada’s Most Stolen Vehicles (equiteassociation.com)

InsurEconomy 2024 – CANADA 15

National Flood Insurance
Approximately 10% of all Canadian households are highly exposed The 2023 federal budget made a clear commitment toward creating
to flooding but lack access to affordable flood insurance.7 Floods rank a national program, but with an increasing number of Canadians
among the most frequent and severe natural catastrophes for Ontario, in high-risk areas unable to obtain flood insurance, the program’s
Quebec and Manitoba. Events involving flood-related perils made implementation cannot come soon enough. Budget 2024 confirmed
up roughly a third of all natural catastrophes from 1983 to 2023.8 IBC the government’s intention to partner with the P&C industry to launch
believes that a national flood insurance program that is delivered a low cost national flood insurance program for those at highest risk
through a partnership between the federal government and P&C by mid-2025, through a subsidiary of Canada Mortgage and Housing
insurers can provide financial protection for households at highest risk Corporation. IBC will continue to advocate further for funding to
and reduce unpredictable disaster costs for treasuries across all levels operationalize the high risk pool.
of government.

The findings of an IBC-commissioned survey in 2024 demonstrate the

demand for flood insurance is high. The survey found that in Atlantic
Canada, 71% of respondents support the federal government’s
introduction of a national flood insurance program, with 76%
believing that flood protection should be a priority for the federal
government.

7
IBC. (2024). It’s time for the federal government to launch the National Flood Insurance Program. https://www.ibc.ca/issues-and-advocacy/canadians-need-flood-protection
8
IBC analysis with data from PCS, CatIQ, Swiss Re, Munich Re and Deloitte.

InsurEconomy 2024 – CANADA 16

Chapter 8: Secondary Functions and Societal Benefits of the
Insurance Industry
Beyond the direct economic impact of the P&C insurance industry on national accounts, and therefore on Canadian economic well-being, there
are often subtle, hidden but widespread socio-economic benefits to P&C insurance. Some of those benefits are as follows.

Financial Loss Minimizer Capital Provider and Supporter of Public Finance

The primary benefit of insurance is to help minimize financial losses. Insurers generally carry a diversified portfolio of stable, long-term
This benefit can range from repairing and rebuilding a commercial investments, such as corporate and government bonds. These
property damaged by a natural catastrophe (e.g., a wildfire, flood or investments allow insurers to invest in assets that support their
earthquake) to helping cover legal costs from a liability lawsuit. The underwriting obligations, which would be too risky to insure without
enhanced financial security provided by insurance gives companies this fallback support.11 By purchasing government bonds, insurers
and consumers peace of mind and helps families and businesses implicitly help finance vital social services such as education and
remain financially stable in times of unanticipated hardship.9 health care. Governments rely on capital markets to finance their
activities, which means taxpayers do not bear full responsibility for
Financial First Responder
government spending. In this way, insurers contribute to the overall
Preventive measures may not always be possible for all types of risks. fiscal and socio-economic health of Canada.
For risks that are high-impact and low-probability, such as a natural
catastrophe, insurance carriers often act as financial “first responders,” Insurance also helps support the supply and demand levers of the
paying claims to those suffering losses before government assistance economy by facilitating national and international trade. For example,
or charitable efforts get underway. By dispatching staff to assist with cargo and credit insurance allow businesses to import goods from
recovery efforts and quickly working to mitigate and repair damage, overseas, bolstering the supply of goods in Canada. Insurance also
insurers help accelerate post-disaster efforts so that businesses and supports demand when a business that has coverage for business
individuals can quickly get back on their feet. 10 While insurance interruption losses cannot fulfill orders because of an insured loss.
hedges against loss, it also facilitates economic restart and recovery.

9
Grant, Eric. (2012). The Economic and Social Value of Insurance. The Geneva Association, 10.
10
Ibid., 12.
11
Grundl, H., M. Dong, and J. Gal (2016). “The Evolution of Insurer Portfolio Investment Strategies for Long-Term Investing,” OECD Journal: Financial Market Trends. 3.

InsurEconomy 2024 – CANADA 17

Innovation Facilitation Reputation Protector
In the innovation ecosystem, many small capitalized start-up All businesses must monitor and closely manage any risk to their
companies take on enormous risk as they develop novel technologies. reputation. When a business is able to demonstrate to clients and
Many technological breakthroughs occur through a lengthy consumers that it has mitigated potential risks with insurance, it gives
incubation process in which the enterprise is created and capitalized the clients and consumers greater confidence in the business. While
by investors. Start-up companies can engage in research and insurance is not always required for all types of businesses, clients like
development on a pre-revenue basis for years (or even decades), to know they are dealing with a reputable company that takes the
generating intellectual property in the process – all prior to the safety of its staff and clients seriously and appropriately addresses its
commercial launch of their new product or service. Managing the financial risk.
financial risk associated with this process would be extremely difficult
Capital Formation Enabler
without liability insurance, errors and omissions insurance, directors’
and officers’ liability insurance, and other forms of insurance, since Insurance can help businesses save money over the long term if
a single claim or operational error could effectively bankrupt the they pair adequate commercial insurance coverage with in-house
enterprise and deplete the invested capital. Commercial insurance risk management strategies. By actively managing risks, a business
helps the end-to-end scientific discovery process to manifest itself in a is less likely to have significant and frequent claims on their policy.
commercial space. This, in turn, helps demonstrate to their insurer that the company
is “risk aware” and taking steps to prevent unnecessary losses. With
Commercial Credit Facilitator fewer claims on the books, a business may be able to lower its overall
When businesses have a brick-and-mortar presence, proof of insurance costs as its risk profile improves.
commercial insurance is a pre-condition to securing a business loan.
Workplace Safety Promoter
For this reason, insurers are also credit facilitators in the economy. This
credit, in turn, facilitates the production, distribution and use of the In addition to standard commercial insurance coverage,
goods or services that the business produces. supplementary coverages help encourage a business and its
employees to operate safely.

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Appendix: Classification of Industry Groups and Methodology

The 2022 North American Industry Classification System12 defines 5242 – Agencies, brokerages and other insurance-related
insurance carriers and agencies, brokerages and other insurance- activities
related activities as follows: This industry group comprises establishments primarily engaged in
selling insurance or providing services related to insurance.
5241 – Insurance carriers
This industry group comprises establishments primarily engaged 52421 – Insurance agencies and brokerages
in underwriting annuities, insurance policies and reinsurance. The 52429 – Other insurance-related activities.
establishments of this group invest premiums to build up a portfolio
of financial assets to use against future claims. Contributions and Methodology used by Statistics Canada
premiums are set based on actuarial calculations of reserves. This All nominal GDP, employment, personal income and tax values in this
industry group includes direct insurance carriers that are primarily report are provided by Statistics Canada, which used detailed supply-
engaged in underwriting annuities and insurance policies directly to and-use tables and input-output models, unless otherwise stated.
policyholders, and reinsurance carriers that are primarily engaged The results of the models quantify the combined direct, indirect and
in assuming all or part of the risk associated with existing insurance induced economic impacts (total impact):
policies originally underwritten by other insurance carriers.
Industries are defined in terms of the type of risk against which the Direct impacts relate only to businesses, employees and
policyholders are being insured, such as death, loss of employment those self-employed workers in insurance carriers (NAICS
due to age or disability, and property damage. 5241) and agencies, brokers and other insurance-related
activities (NAICS 5242), for example, premium taxes paid
52411 – Direct life, health and medical insurance carriers directly by insurance carriers.
52412 – Direct insurance (except life, health and medical) carriers
Indirect impacts (or supply-chain impacts) are generated by
52413 – Reinsurance carriers the upstream (supply-chain) purchases made by operations
identified in the direct impact phase. For example, operations
in the P&C insurance economy require external legal and
administrative services.

12
Statistics Canada.

InsurEconomy 2024 – CANADA 19

 Induced impacts are derived when employees of businesses insurance claims incurred. Investment income is the sum
identified in both the direct and indirect impact phase spend of interest and dividend income, realized gains and investment
the earnings made from the activity under analysis. This expenses. The P&C insurance industry’s share of the total output for
re-spending results in additional levels of employment, the insurance industry was then calculated by dividing the output
income and tax revenues, which can be observed across a from P&C insurance carriers by the total output for insurance carriers
wide range of industries. (defined as L&H plus P&C insurance). This share was then applied to
all economic impact parameters for insurance carriers available from
Total Impact of P&C Insurance Carriers
Statistics Canada, yielding estimates for P&C insurance carriers.
Statistics Canada produces GDP, employment, personal income
and taxes on products by detailed tax and taxes on production by Total Impact of P&C Insurance Agencies, Brokerages and
level of government estimates for insurance carriers. However, these Other Insurance-related Activities
estimates include both the P&C and L&H insurance industry segments. Almost all of the output of insurance brokers, agents and adjusters
To isolate the direct contribution of the P&C insurance industry, is purchased by insurance carriers. As a result, the impacts of P&C
Statistics Canada uses detailed financial data from insurance carriers insurance agencies, brokerages and other insurance-related activities
to calculate the output estimates for the P&C and L&H insurance were estimated by running an output shock on the insurance carriers;
industries. As defined in the 2008 system of national accounting, the the economic impacts of this industry are included in the model
output for each of these two industries was calculated by adding results as indirect impacts of insurance carriers.
insurance premiums earned to investment income, then subtracting

InsurEconomy 2024 – CANADA 20