Are you considering how to become an insurance broker in Canada? Are you planning to start a new career or change to a better one in the insurance industry? Would you want to work with people regarding their financial life to secure their future?
If you answer yes, then this article is for you. The insurance industry, over the years, has employed more than 148,600 workers across the country. This is excellent news for you as you are going into an industry that can employ many people.
Keep reading as we explore the meaning and types of insurance brokers, the steps to becoming an insurance broker in Canada, how to acquire your licensing, and other specific information regarding the industry.
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Who is an insurance broker?
An insurance broker simply helps customers to choose the right insurance plan. They can work in an office or from anywhere as long as they can meet the target. As a broker, you will manage all aspects of the insurance deal. These include finding the client’s needs, recommending and advising the right insurance policy, making payment arrangements, and facilitating claims when needed.
What are the Individual Provincial Requirements to become an Insurance Broker in Canada?
Apart from the primary conditions to become an insurance broker in Canada, individual provinces may have specific requirements that you must meet. Thus, you can only sell insurance in the province you acquired your license. Therefore, you must meet their basic requirements to penetrate another province in Canada.
However, with your license as an insurance broker in any province, you will not need to take any course or examination to qualify for any license in another province. In most situations, merely providing your certification from another province qualifies you to apply for an additional license in a new province.
In another situation, you must provide proof of ongoing Continuing Education (CE) hours each year to help you maintain the license. To be on the safer side, you can check with your province’s insurance regulator website on how you can obtain the CE hour. This website will give you the right information regarding your provincial insurance regulator. Again, being on the right of your career as an insurance broker in Canada will help you to succeed in this field.
Are insurance brokers the same as insurance agents?
Although the two professionals look alike, they have some slight differences. They mediate between an insurance company and its clients and must ensure client satisfaction and company profit. However, they differ in the following ways:
- An agent works for the insurance company, while a broker works for the client. That is, brokers act on behalf of the clients and must ensure their interests are protected. Agents ensure the products of the insurance companies they work with are sold to the clients.
- The duties of brokers are limited to only facilitating insurance contracts, while the agents go as far as sealing the deal with the clients.
- Agents majorly represent specific insurers, while brokers can represent as many companies as they wish.
What are the types of insurance brokers that exist?
Insurance brokers are of three major types, depending on their roles. Some of them are:
Retail broker
A retail broker communicates with insurance clients to help them to locate and buy the right insurance for their lives, property, business, etc. However, they may need help to handle the sale of complex insurance deals.
Wholesale brokers
A wholesale broker does not deal directly with clients but relies on retail brokers to link them with them. As a result, they often only engage with their customers indirectly, except through retailers. As a result, they must be highly skilled in the field of insurance and must be able to handle complex risks.
Surplus line brokers
This is an aspect of wholesale brokers, but they act as the link between the wholesaler and excess and surplus lines (E&S) insurance companies. They deal with insurance policies that are highly risky for a regular insurance company. Some of the issues they handle are:
- Startups coverage
- Clients who need insurance to cover a particular risk that cannot be found in regular insurance companies
- Businesses that are going bankrupt, etc.
What are the steps to becoming an insurance broker in Canada?
There are various steps to becoming an insurance broker in Canada. However, we are focusing on the general steps to becoming a professional in this field. They include:
Acquire an education
You will need a formal education to become an insurance broker. As a result, having a high school diploma or college education is a step in the right direction. However, if you have a high school diploma, consider post-secondary education. This is because having a degree or any other post-secondary training will provide you with basic knowledge to boost your resume and increase your career prospects.
Thus, you may obtain a degree in insurance, marketing, economics, business administration, finance, accounting, psychology, sociology, and related fields. In addition, some schools offer insurance and risk management or actuarial science, but it is not a popular course. Fortunately, with a background in these other courses, you can intern in an insurance firm to gain knowledge.
Select a specialty
Insurance is of various kinds, and being a broker means you can sell any insurance product. However, it is pertinent you choose a niche to focus on. Some areas of focus in insurance are life, property, casualty, home, auto, pet, disability, health, commercial, and others. Most provinces in Canada insist that you obtain a separate license for selling each type of insurance package.
Meet the licensing eligibility
Since each province has its pre-licensure requirements, you will need to study that of your province once you have chosen the insurance niche. You may also hold different licenses for each type of insurance you sell. Remember to acquire additional licensing for the provinces you operate in if you want to become an insurance broker in Canada.
Take the licensing exam
After meeting all the conditions for licensing in your province and beyond, you will need to face the next hurdle, which is to pass the licensing exams. Before taking the exam, you will need to pay the exam fees. In most cases, you may take a short course to prepare for the exam. Also, the exam may take place on a testing site handled by an outside company.
This exam will be internet-based, and you will have multiple-choice questions to answer. After the exam, you can find out if you passed or not. If you did not make it, you could reschedule a retake. If you made it, you could proceed to the next level.
Apply for your license
Once you pass the licensing exam, you can then apply for your licensing. This will require you to pay a processing fee. When this is done, and you have your license, you can start building your customer base or applying for jobs in insurance companies. You may equally take some courses before you can renew your license.
Advance your knowledge
The last step to becoming an insurance broker in Canada is to gain additional knowledge. If you cannot obtain a degree, you can take some certifications to qualify. These certifications can be paid or voluntary; some can be outside the insurance field. As such, you can obtain some online certifications in risk management and financial planning, customer services, and relevant programs.
Frequently Asked Questions
What are the major duties of an insurance broker in Canada?
An insurance broker ensures clients’ needs are satisfied while they make money through commission. This commission is based on the number of products they can sell per time.
Meanwhile, before selling the products, an insurance broker assesses the risk profile of the prospective client and seals a deal with them if their needs fall under what an insurance company can cover. After that, the insurance broker will keep offering services to the client, including updating existing insurance policies, preparing reports, and providing advice where applicable.
What is the difference between a broker and an insurer?
A broker, having acted on behalf of the clients, finds the most suitable insurance policy. But on the other hand, the insurer is the company and uses agents to seal the insurance deal.
What is the average salary of an insurance broker in Canada?
The national average salary of an insurance broker is $49,970 each year. However, the salary often differs from province to province.
How do I become an insurance broker in Canada?
To become an insurance broker in Canada, you must complete a course of study and pass the licensing exam in the province where you reside and probably be practicing. Besides, the kind of education and licensing requirements you will need are determined by provincial authorization bodies. Also, these vary from province to province.
How much does it cost to become an insurance broker in Ontario?
To acquire an insurance license in Ontario, you must complete a General Insurance Agent application, make available the right supporting documents and pay an application fee of $150.
Conclusion
Becoming an insurance broker in Canada is one of the dreams of many. If you follow the simple steps we provided here, you will soon become a successful insurance broker in Canada.
