May 4, 2019 by Insurance Brokers Association of Alberta
EDMONTON, ALBERTA, May 3, 2019/insPRESS/ – Insurance Brokers Association of Alberta (IBAA) is pleased to announce the results of a national study that measures the economic and social impacts of property and casualty (P&C) insurance brokers in Alberta and across Canada.
“We know that insurance brokers’ business operations add value to the provincial and national economies,” said IBAA CEO George Hodgson. “We also know that virtually every city and town in Alberta benefits from the philanthropy and community involvement of brokers and their employees.”
To more fully understand these impacts, the Insurance Brokers Association of Canada (IBAC) engaged Deloitte Canada to analyze the economic contribution generated by the insurance brokerage industry to the national and provincial economies, and to identify a range of social contributions.
In collaboration with IBAC’s 11 Member Associations, Deloitte surveyed 1,770 brokerage owners across Canada and estimated that in 2017, member brokerages contributed approximately $5.4 billion to Canada’s GDP, of which about $3.3 billion was contribution to labour income. The brokerage industry also sustained an estimated 58,300 FTE (full-time equivalent) jobs in Canada. In other words, every dollar spent on broker business activities generated approximately $1.49 in total GDP in Canada’s economy. Member brokerages also generate significant production and consumption taxes for the government, estimated to be more than $480 million in 2017.
Member brokerages contribute approximately $653.5 million to Alberta’s GDP. They also create or sustain an estimated 5,733 FTEs across the province. Moreover, for every dollar spent on capital and operating expenditures by member brokerages in the province, insurance brokers are estimated to contribute $1.31 of value-added to the Alberta economy.
The study also illustrates a number of social benefits that insurance brokers bring to their communities. For example, 90% of brokerages surveyed donate financially and 70% of their employees volunteer their time to local charities and social causes. In addition, case studies highlight brokers who respond to natural disasters, conduct safety training and education, promote diversity and inclusion, and connect with rural and indigenous communities, among other contributions.
“In May of 2016, Alberta experienced its most catastrophic wildfire in Fort McMurray. It destroyed more than 2,500 homes and forced over 85,000 residents to evacuate, making it the largest evacuation in Canadian history.30 It was also the costliest fire in Canadian history, resulting in over $3.5B of insured damage.31 In the days following the fire, insurance brokers played an important role in the crisis management efforts by ensuring that emergency funds were channeled effectively and claims were reported to insurance carriers. A main obstacle faced by policyholders in the event of a crisis is insurance literacy – the majority of clients do not know the name of their insurer nor the details of their coverage, making it important for brokers to act as an advisor and educate them on insurance products.
The Fort McMurray branch of Rogers Insurance, with 18 employees and over 5,000 clients, was forced to evacuate from the area and close its office for 30 days. All emails and phone calls were redirected to the Calgary office, and many employees relocated there and to other offices in the province to help with their clients’ claims. A team was deployed and brokers worked overtime to send out client communications as well as notices to insurance companies to file losses. According to Nicole Deitz, Commercial Lines Associate & Office Manager, Rogers Insurance handled over 4,700 claims related to the fire, resulting in more than $600MM paid out in losses to date.“
“This report puts real numbers on the significant economic impact of insurance brokers in Alberta,” added Hodgson. “And just as importantly, it shows how brokers are making a positive difference in their communities. Brokers everywhere can be proud of their profession and the contributions they make to Canada.”
The IBAC Economic Contribution Study can be found at https://www.ibaa.ca/page/IBAA_Advocacy.
Media Contact Information:
George Hodgson, CEO
Insurance Brokers Association of Alberta