Analysis of Labour Distribution Trends Across Key Segments of the Insurance Industry
Ontario and Toronto are the principal epicenters for insurance-related activities within Canada. Labour Force Survey data from 2014 reveals that Ontario comprised 36% of the national workforce in the Insurance Carriers industry and 44% in Agencies and Brokerages. By 2023, Ontario’s proportion had increased to 46% and 47%, respectively. Additionally, Toronto’s prominence within Ontario’s insurance industry has strengthened significantly; in 2023, the city accounted for 61% of Ontario’s workforce in Insurance Carriers and 49% in Agencies and Brokerages. This data not only highlights Toronto’s central role but also underscores its position as a dominant force in the industry, firmly establishing Ontario and Toronto as the heart of Canada’s insurance industry workforce.
Labour Force Size: Insurance Carriers and Agencies and Brokerages
This section delves into the evolving landscape of the size of the labour force within two critical segments of the insurance industry: (i) Insurance Carriers and (ii) Agencies, Brokerages, and Other Insurance Related Activities. By examining annual data spanning from 2014 to 2023, this section uncovers the nuanced dynamics of these segments across different geographic delineations—specifically, Canada and Ontario excluding Toronto CMA, and Toronto CMA itself. This analysis highlights the distinctive growth patterns and challenges faced by these key segments of the insurance industry and the pivotal role of Toronto CMA as a central hub influencing broader industry trends.
As illustrated by Figure 2, the robust growth of the labor force in the Insurance Carriers industry within the Toronto CMA, has more than doubled from 29,400 in 2014 to 64,300 in 2023. While the insurance labour force also grew in other parts of Canada, the relatively modest growth in Ontario outside of Toronto suggests a centralization of industry activities in the Toronto CMA.
Compared to the Insurance Carriers, the Agencies and Brokerages growth has been far less dramatic and been relatively stagnant (see Figure 3), reflecting shifts towards digital platforms. The increasing use of comparison tools and digital brokers has made it easier for customers to bypass traditional brokers and agencies, leading to slower workforce growth in this industry.
Insurance Carriers, tasked with underwriting and managing complex financial portfolios, require more specialized staff to handle increasing data analysis, risk assessment, and compliance needs. In contrast, the Agencies and Brokerages might be experiencing saturation or more significant impacts from technological efficiencies. This divergence between the two key segments of the insurance industry highlights a shift toward greater centralization of insurance operations within Carriers, while intermediary services face potential disruption. This data findings align with discussions held with industry experts, who also noted more pronounced growth among Carriers than in Agencies and Brokerages.
With the insurance industry experiencing growth, particularly in Toronto, there is a need to ensure that the workforce can meet the industry’s evolving demands. Workforce development programs could focus on skill development initiatives by collaborating with educational institutions and training centers to develop curriculums that align with the skills that are increasingly demanded by employers such as data analysis, cybersecurity, and digital marketing.
Employment Trend in Key Segments of the Insurance Industry
The last ten years have been transformative for the insurance industry in Ontario, with Toronto showing significant shifts in employment dynamics as the industry responds to digital innovation and market demands.
Insurance Carriers: Employment in the Insurance Carriers has seen consistent growth in Ontario and Toronto CMA as depicted in Figure 4 and Figure 5 respectively, indicating a strong, steady expansion, particularly from 2021 onward, growth rates in employment accelerated significantly. Employment in Ontario rose from 75,500 in 2021 to 104,300 in 2023, and in Toronto, from 39,200 to 63,100 over the same period.
Factors Contributing to Employment Growth in Insurance Carriers
Post-COVID Economic Recovery: The period from 2021 to 2023 was marked by recovery from the COVID-19 pandemic, which had initially caused widespread economic disruptions. The insurance industry, critical in providing stability during uncertain times, saw an increased demand for insurance products as individuals and businesses sought to mitigate new risks associated with the pandemic. This demand boost could explain the rise in employment as companies expanded their workforce to handle increased workload, customer service, and claims processing.
Technological Investments: Substantial investments in technology to improve operational efficiency and customer engagement might initially require more human resources to integrate and manage these new systems. Expanding into new, complex product areas, such as cyber insurance or specialized commercial policies, which require additional specialized staff.
Expansion and Diversification: Expansion into new markets and diversification of insurance products to include extreme weather-related policies require additional expertise and support staff.
Agencies, Brokerages, and Other Insurance-Related Activities: Employment in Agencies and Brokerage shows more fluctuationsiv and often stagnant growth in employment. This segment for Ontario were 41,900 in 2014, employment peaked in 2016 at 51,800 before declining to 45,600 in 2023. In Toronto CMA, employment ranged from 19,900 in 2014, reaching a peak in 2018 at 24,800, before experiencing declines and a moderate recovery to 22,500 by 2023.
Factors Contributing to Fluctuations in Employment of Agencies and Brokerages:
Market Consolidation: The fluctuation in employment numbers could reflect market consolidation where smaller agencies merge or are acquired by larger firms, potentially reducing the number of individual agencies but stabilizing or increasing employment in surviving firms.
Increased Online Platforms: The rise of online insurance platforms may reduce the need for traditional brokerage services, impacting employment. However, specialized brokerages that have adapted to online models might regain or increase their staffing to manage these new systems.
Economic Sensitivity: Agencies and brokerages are highly sensitive to economic cycles. The fluctuating economic recovery, consumer confidence, and changing insurance needs directly impact their employment levels.
Gender Distribution Trends in Employment
Figures 6 provides a snapshot of gender composition within the insurance industry in Toronto. It shows a positive trend in employment numbers for both male and female workers in the insurance industry in Toronto’s Census Metropolitan Area (CMA) from 2014 to 2023. However, female employment consistently exceeded male employment throughout the period.
The figure shows a steady rise in employment numbers for men from 2014, starting below 20,000 and reaching almost 40,000 by 2023. Female employment began higher than male employment at 33,000 in 2014 and demonstrated a more significant growth, especially noticeable from 2021 onwards reaching close to 50,000 by 2023. This indicates that the insurance industry has traditionally been an option for women looking for a meaningful career in finance due to industry efforts to become more inclusive and to create equitable opportunities.
This overall upward trend in both male and female employment suggests stability and a growing capacity of the industry to support and expand its workforce. This is driven by factors such as economic expansion, technological advancements in insurance services, and increased demand for insurance products.
Employment Share by Age Categories
The demographic makeup of employees in an industry reveals significant insights into the industry’s workforce. By analyzing the employment share across different age categories, stakeholders can better understand the workforce dynamics at play, enabling more effective planning for recruitment, retention, and retirement processes.
Figure 7 analyze the distribution of employment by age groups-25 to 34 years (youth), 35 to 54 years (prime working age), and 55 to 64 years (near retirement) within Toronto’s insurance industry, and compare these trends to the overall employment patterns across all industries over the decade spanning from 2014 to 2023v.
While the overall share of younger employees (24-34 years) in all Industries has shown relative stability, the insurance industry has demonstrated more fluctuations and a generally higher share of employment in this age group. This indicates a strategic focus within the insurance industry on attracting younger talent, due to the need for digital skills or innovative thinking that younger employees can bring. The insurance industry should continue to build on this momentum by enhancing its attractiveness to younger professionals. Offering training in emerging technologies within insurance can help capitalize on their technical skills and integrate them effectively into the workforce.
The insurance industry has shown more variability in the employment share of prime working age employees (35-54 years) compared to the steadier decline observed in all industries. This could reflects the industry-specific cycles of hiring and layoffs during economic downturns or structural changes within the sector.
The insurance industry exhibits a sharper decline in the share of near-retirement age employees (55-64 years) compared to a more gradual increase in all industries. This divergence suggests that the insurance industry may be facing challenges in retaining older workers, due to rapid digitization. These technologies often replace or drastically change traditional roles, which can be more challenging for older employees who may have less experience with these new tools. The rapid pace of digitization could be leading to a skills mismatch, where the skills of older workers are less aligned with the new technological requirements. Another factor could be retirement trends. Employees in the insurance industry may be opting for retirement earlier due to attractive pension plans or buyout packages. In contrast, the percentage in all industries with a slight increasing trend, possibly reflecting broader societal trends such as delayed retirement.
Employment Distribution in Insurance Industry by Levels of Education
The distribution of employment by educational levels shows the educational qualifications most prevalent among industry professionals, offers critical insights into the industry’s talent and its alignment with educational attainment. Figure 8 reports the employment distribution by educational attainment in Insurance Carriers and Agencies and Brokerages in Toronto CMA in the year 2023.
Insurance Carriers exhibit a lower percentage of High School Graduates (7%) compared to the overall industry average (17%). This suggests a higher barrier to entry, where roles often require at least some post-secondary education due to the technical nature of the work. Furthermore, there is a notable demand for professionals with Above Bachelor’s degrees (24%), significantly higher than the overall industry average (19%), indicating a need for specialized knowledge and skills in high-level decision-making and policy development.
Agencies and Brokerages, on the other hand, show a higher prevalence of College Diplomas (37%) compared to Insurance Carriers (25%). This segment places a strong emphasis on practical, skill-specific training that diploma programs provide, preparing individuals for roles in underwriting, brokerage, and claims.
Both segments demonstrate a higher reliance on Bachelor’s degrees (44% for Carriers and 40% for Brokerages) compared to the industry average (34%). This underscores the industry’s preference for a solid educational foundation in specialized areas pertinent to insurance.
To support the demand for highly educated professionals, Toronto offers a range of educational programs tailored to the insurance industry. For example, Humber College’s Insurance Management-Property and Casualty (P&C) one year graduate certificate program prepares graduates for management roles in the property and casualty sector, covering fundamentals across underwriting, loss adjusting, risk management, and more. The curriculum includes business communications, insurance accounting, and customer service, with a strong focus on experiential learning.
Seneca College’s two-year program Business Insurance Diploma in cooperation with the Insurance Institute of Canada (IIC), is designed with input from national insurance firms, focusing on brokerage, underwriting, and claims within the general insurance industry.
Centennial College’s Insurance Management two-semester graduate certificate program is aimed at college or university graduates, focusing on claims investigations, adjusting, underwriting, and brokering in the property and casualty sector.
University of Toronto’s Master of Financial Insurance (MFI) program is designed for students with strong backgrounds in statistics, actuarial science, economics, or mathematics, focusing on statistical methods, financial mathematics, and insurance modeling.
These programs reflect Toronto’s strategic approach to fostering a skilled workforce capable of meeting the complex demands of the insurance industry. By aligning educational opportunities with industry needs, Toronto not only enhances the local talent pool but also positions itself as a competitive player in the global insurance market.
iv Understanding the confidence intervals is crucial, especially when dealing with figures that appear to fluctuate. Accurate interpretation requires careful consideration of these intervals to avoid overestimating the importance of minor fluctuations in employment data due to sample size.
v In the interest of data integrity and reliability, the age groups 20-24 and 65+ years were excluded from this analysis because of partial data availability across the selected timeframe, focusing on the most consistently reported age categories.