Insurance has been called the most important export of the Canadian financial services industry. There are a large number of insurance providers in Canada, but there is a concentration at the top due to a financial revolution that has hit the once sleepy world of life insurance.
The Demutualization revolution
Ten years ago a large chunk of the Canadian life insurance scene was in the mutual sector, where a company is owned by the policy holders and is not quoted on the stock exchange. While this had the advantage of sharing all profits with the shareholders it also has the disadvantage that there are few reserves and no easy way of raising capital when there is a problem. Some life insurance providers are still mutually owned, examples include the Co-Operators and the insurance arm of the Desjardins group, a credit union federation that is the largest financial institution in Quebec. In 1999 the Canadian government passed a law that put in a simple process for mutual health and life insurance companies to "demutualize". Policyholders could vote on proposals to turn mutually held companies into companies getting either shares or cash as compensation.
Life insurance in particular has grown dramatically in Canada in the last twenty years. Life insurance now covers more than 80% of Canadian households, and so there has been a certain amount of saturation. Some of the biggest insurance companies in Canada are specialist life insurance providers, such as the biggest Manulife whose full name is the Manufacturers Life Insurance Company. Other massive life insurance specialists include Great-West Life Assurance Company, Sun Life, Empire Life, Standard Life and the Economical Life Insurance Group.
There has been a certain amount of diversification away from life insurance due to the saturation of the market. This has been in three ways, overseas expansion, going into other forms of insurance or dealing with other areas of long term saving - particularly investments. Insurance based policies have traditionally been a popular form of long term saving for those who are not confident with the stock market, and pension annuities are essentially a reverse life insurance policy, paying out if you don't die. Life insurance companies have been keen to stress their specialization in this area by providing investment services, and in many cases by giving their investment services division a different name and identity. Even relatively small life assurance companies such as Assumption Life have built up impressive asset management arms.
In Canada health insurance tends to be sold as a complimentary product to life insurance with a number of life insurers such as Great-West having built up strong health insurance branches.
Auto insurance is an area of strong competition for Canadian companies. This is largely due to the fact that it is one of the easiest areas for American companies to break into, for example the Illinois based giant State Farm™ has a very strong presence in Canada.
Mortgage insurance is one of the few areas that has a sizeable direct government presence with the Canada Mortgage and Housing Corporation taking two thirds of the market.
Commercial Insurance tends to be a very specialized area. The Dominion is a generalist insurer which has made its name here, and the American Insurance Group (AIG) also built up a big book before needing to be rescued by the United States government. The oldest insurance company in Canada, the Guarantee Company of North America has a niche specialism in insuring Government procurement projects. The Co-Operators, who were founded by Saskatchewan wheat farmers, are the biggest providers of farm insurance (although they also sell life insurance and in fact this is what they started selling).
Insurance companies in Canada
Big Insurance Providers
Canada has for a long time been a good place for insurance providers with a stable economy and a base of well educated predominantly middle class consumers. This has meant that a number of insurers have grown to be very big indeed and are international companies. A number of large insurance providers in Canada control between them just over 50% of the insurance market.
Manulife Financial Corporation - The Manufacturers Life Insurance Company is Canada's largest insurance provider and the second largest in the NAFTA region. It has extensive overseas operations in Asia and owns John Hancock Insurance, a large insurer in its own right within the United States. The Great-West Life Assurance Company, or Great-West, is one of the largest life and health insurers throughout Canada. Sun Life Financial Services of Canada Inc. (which incorporates the Clarica Life Insurance Company - formerly Mutual Life) The Dominion - Its full title is the Dominion of Canada General Insurance Company. It was founded by the first Prime Minister of Canada in 1887, and so is part of the commercial life of Canada. It is a general insurance company that runs across most sectors of the insurance market
Specialist Life Insurance Providers
As well as some very big firms that get the bulk of their fees through life assurance there are a number of "small" firms which would be considered big if they were operating in other sectors.
Empire Life - Also Empire Vie it has grown through acquisition to be one of the top 10 insurers in the country. It incorporates the Concordia insurance group.. The Economical Life Insurance Group PC Financial (President's Choice Financial) - This is a brand of the Loblaws supermarket chain Assumption Life - Based in New Brunswick and with strong local roots in the French speaking Accadian community Standard Life - Edinburgh based parent company Desjardins Financial Security Life Assurance Company
Home and Auto Insurance providers
There are a number of providers who specialize in the Home and Auto market, although some of them are expanding into Life insurance.
SSQ Financial - Quebec based company which offers a range of personal insurance products and is quite strong in the Real Estate market Insurance Corporation of British Columbia - Owned by the provincial government of British Columbia State Farm™ Canada - Subsidiary of America's largest auto insurance provider The Personal - a pure group insurance company run by the Desjardins group Industrial Alliance - Also a big life insurer
Arms of Financial Institutions
Banks and other large financial institutions will often have personal, business and credit insurance offered under their own name. Some examples include:
National Bank Insurance, RBC Insurance, TD Insurance
Canada doesn't just have life insurance, there are a number of companies that specialize in commercial insurance: The Co-Operators - A mutually owned insurer based in the West of Canada which is Canada's largest farm insurer The Guarantee Company of North America - Based in Quebec, Canada's oldest insurance company now specializes in Government contracts and provides the majority of procurement insurance products.