Insurance Sector in Canada

g., automobile, marine, airplanes property), negligence and legal liability" (Introduction to Canadian Financial System, p. 223).
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             Over time, insurance has come to represent an extremely important part of Canada's society and economy. "Canadians spend almost 13 per cent of their GDP for all types of insurance" (Introduction to Canadian Financial System, p. 222).Insurance companies are also a significant source of investment capital for the Canadian economy. "At the end of 1998, life insurance companies made investments totaling $178 billion. Though placed in many different types of investment vehicles, almost one-quarter of this sum was put into mortgages" (Statistics Canada, http://142.206.72.67/03/03e/03e_001f_e.htm). In light of the significance of this sector, it is not unusual to find that the government has come to be involved through regulation. "Approximately three-quarters of the P&C insurers active in Canada are supervised by the federal government through the Office of the Superintendent of Financial Institutions (OFSI), as they operate in more than one province or are branches of foreign companies" (Property and Casualty Insurance in Canada, Department of Finance Canada, http://www.fin.gc.ca/toce/2001/property_e.html).
             CURRENT SITUATION WITHIN THE INSURANCE SECTOR.
             At the present time, there are a total of 216 property and casualty insurance companies operating in Canada as well as 7,218 agencies and brokerages. These companies employ more than 100,000 people. Furthermore, approximately 40 percent of these people are employed by primary insurers (www.cdnins.com/summary.htm). In 2000, this industry generated more than $20 billion in net premiums, and over half of this was generated from automobile insurance (see Chart 1). The industry also realized a profit of over $1 billion, which was virtually unchanged since 1998 (Property and Casualty Insurance in Canada, Department of Finance Canada, http://www.