The Transformation of Toronto’s Insurance Landscape

Toronto stands as a prominent hub in the global insurance industry, boasting one of the largest and most concentrated clusters of insurance companies, brokerages, and associated financial services. Toronto is home to one of the largest insurance hubs. This dense aggregation not only positions Toronto among the top-tier insurance markets worldwide but also underscores its pivotal role on the international stage. The city competes directly with other major global financial centers such as London, New York, and Singapore, thanks to its robust infrastructure, advanced regulatory environment, and the presence of a highly skilled workforce.

Canadian insurance traces its roots back to the 19th century and several elements collectively transformed the industry into a cornerstone of Canada’s economy. As cities like Toronto, Montreal, and Halifax expanded, the need for financial services, including insurance to cover business and personal losses, grew. The construction of the Canadian Pacific Railway (1881-1885) and the increase in maritime activities created a greater need for marine and cargo insurance. Frequent major urban fires like the Great Fire of Saint John in 1877 and Toronto in 1904, highlighted the need for fire insurance, leading to the establishment of numerous local insurance companies. The growing awareness about the importance of protection against unexpected events has boosted the life insurance industry, with several Canadian companies emerging to serve this market.

The entry of British and American insurers into the Canadian market intensified competition, improved services, and contributed to industry modernization. As the industry expanded, so did the need for regulation. This led to the introduction of insurance acts that standardized practices and enhanced consumer trust.

The establishment of the first insurance companyⁱ in Montreal in 1804 marked a milestone, setting the stage for an industry that would grow robustly in response to the expanding economy. However, the history of the insurance industry in Canada reveals a fascinating shift of financial hubs from Montreal to Toronto over the decades, especially notable in the 1970s and 1980s. This shift was triggered by the election of the Parti Québécois (PQ) government in 1976, which pursued policies promoting Quebec nationalism, including the controversial 1980 Quebec sovereignty referendum and language laws like Bill 101.

These developments created concerns about political and economic stability, as well as the implications for conducting business in a bilingual or French-dominated environment. As a result, companies like Sun Life Financial (which officially announced its move to Toronto in 1978) and others opted to relocate their headquarters to Toronto, which was seen as a more stable and business-friendly city at the time. This migration contributed to Toronto’s rise as Canada’s financial hub, overtaking Montreal, which had held that position historically. Today, Toronto’s insurance industry has been shaped by centuries of adaptation and innovation. It is a broad ecosystem encompassing everything from major domestic and international insurers to innovative start-ups that leverage cutting-edge technology to redefine risk management. The industry not only protects against traditional risks but also addresses complex modern challenges such as cyber threats, climate change, and pandemics.

Today, Toronto is not only a hub for insurance but also a major center for diverse financial services. The city hosts headquarters of several major insurance companies and contributes significantly to the national and international insurance markets.

ⁱ https://www.swissre.com/dam/jcr:64b0fdca-f4d8-401c-a5bd-9c51614843c0/150Y_Markt_Broschuere_Canada_web.pdf