P&C insurance employs 22,000 directly in more than 6,000 firms in Ontario: Study

The property and casualty insurance industry has more than 6,000 firms in Ontario employing more than 22,000 people, contributing billions every year to the province’s economy, according to a study released Thursday.

“In total, the property & casualty insurance industry in Ontario directly contributed $4.1 billion to real gross domestic product (GDP) in 2009,” according to the report, titled Property and Casualty Insurance Industry in Ontario: Economic Benefits across the Province. “Including the direct, indirect and induced impacts, $7.5 billion in real GDP can be attributed to the P&C insurance sector.”

The report was prepared by Jupia Consultants Inc. for the Insurance Bureau of Canada. 

The report notes that the Conference Board of Canada conducted an “economic impact assessment” of P&C and determined it employed 22,000 directly in Ontario, identifying the Greater Toronto Area has the “hub” of Canada’s insurance industry. 

“The Conference Board also estimates that P&C insurance activity created 41,000 additional jobs, bringing the total number of direct, indirect, and induced jobs created specifically by the P&C insurance industry to 63,000 people.”

Noting that Statistics Canada plans to published detailed industry and occupational data from the 2011 census this year, Jupia stated its report “took a preliminary look at the economic footprint” of P&C by region, using Statistics Canada’s Canadian Business Patterns report.

“The London/Chatham-Kent region has the distinction of having the highest concentration of P&C insurance related firms in the province (adjusted for population size),” Jupia wrote. “There are 58 P&C insurance and related firms per 100,000 persons residing in the region.” The region has 54 carriers, second only to the greater Toronto area. It also has 333 brokerages and agencies and 20 adjusters.

The London/Chatham-Kent region, which includes St. Thomas, Woodstock, Ingersoll, Strathroy and Tillsonburg, employed between 2,550 and 5,600 persons.

“At the midpoint employment level (of 4,070) and using average employment income data from Statistics Canada for 2011, this would represent an approximately annual payroll of $261 million in the London/Chatham-Kent area.“

Of the 6,179 firms in Ontario, Jupia reported 2,271 had fewer than five employees while 1,999 had an unknown number of employees. The report suggests the bulk of the 1,999 with an unknown number are “businesses such as sole proprietorships and partnerships without a monthly payroll.” There were 978 companies with five to nine workers, 459 with 10 to 19, 309 with 20 to 49 workers and 98 employed between 50 and 99. Twenty-eight firms had between 100 and 199 workers while 37 employed more than 200.

“The Kingston/Brockville area has the distinction of having the highest concentration of small firms in its insurance cluster among all the region’s reviewed for this report,” Jupia wrote, quoting StatsCan as reporting that between 1,250 and 2,850 persons work in P&C insurance and related activities in the region, which includes Belleville, Perth, Smiths Falls, Ganonoque and Prescott.

“At the midpoint employment level and using average employment income data from Statistics Canada for 2011, this would represent an approximately annual payroll of $131 million in the Kingston/Brockville area.”

The Greater Toronto Area had 2,800 P&C insurance-related firms, including 19 related reinsurance firms, or 53% percent of the national total. For the purpose of the study, the GTA goes west to Mississauga, north to Newmarket and east to Clarington. The GTA had 198 carriers, 2,229 brokerages and agencies plus 131 claims adjusters.

Southwest of Toronto, the Oakville/Burlington/Hamilton region is the “second largest P&C insurance cluster in Ontario” with 765 P&C-related firms, according to the report. For the purpose of the study that region included Brantford, Haldimand, Norfolk, St. Catharines and Niagara Falls.

The Ottawa region, which includes Deep River, Pembroke, Arnprior and Hawkesbury, employs between 2,400 and 5,100 in P&C.

“The Sarnia region has the distinction of having the second largest P&C insurance-related industry in the province as measured by number of firms adjusted for the size of the local population,” the report stated. “Overall, there are 56 P&C insurance and related firms per 100,000 persons residing in the Sarnia region.”

The third-largest cluster of P&C employment in Ontario is in the Kitchener/Cambridge/Waterloo/Guelph region, which has 404 P&C insurance-related firms and 51 firms per 100,000 persons.