Insurance brokers are experts on insurance who perform the important task of finding the best coverage for companies, organizations, and individual clients. Whether it’s auto, home, commercial, or a slew of other types of insurance, it’s the insurance broker’s job to act as intermediary between their clients and insurance companies.
While you can register as an insurance broker in all the major Canadian provinces, this article will focus on Ontario. If you’re a resident of Ontario or plan to move there, choosing the career path of insurance broker can be a good move.
Ontario is the most populated province in the country, with one-third of the total population residing there. It’s also the most prosperous, thanks to it having diverse industries and a large share of the country’s resources. A population of that size and its different industries will mean it has a robust market for many different types of insurance. The demand for mandatory auto insurance alone is substantial.
The career of an insurance broker can be lucrative. Since it entails dealing with all sorts of people and helping them find the best coverage for their needs, it can also be a fulfilling career. In this article, Insurance Business shows you how to become an insurance broker in Ontario. We’ll provide insight on relevant topics like how to get your insurance broker licence in Ontario, how to become an insurance broker in Ontario online, the insurance broker licence cost, and more.
Before getting into the process of how to become an insurance broker in Ontario, it’s important to be clearly familiar with the role. There are times when insurance brokers get confused with insurance agents, since they both act as intermediaries between insurance buyers and insurance companies. Here are the notable differences between insurance brokers and insurance agents:
Across Canada, the minimum requirement is for aspiring brokers to have at least a high school diploma or GED equivalency. While a college education is not an essential part of how to become an insurance broker in Ontario, having this degree still has value.
Although not mandatory, a college degree can help you become a better broker. Accounting, finance, economics, business law and other similar courses can give you the foundational knowledge that can help you grasp many complex insurance industry concepts. Meanwhile, a post-graduate degree may be helpful for applying for more advanced licences like RIBO levels 2 and 3.
Becoming an insurance broker in this province is a lot like many other parts of Canada. You can refer to this general guide on how to become an insurance broker in Canada.
But apart from having the requisite education, the process of becoming a licensed broker in Ontario involves several steps. Here’s what you need to do:
Aspiring insurance brokers can take licensing courses in preparation for the licensing exam. The Insurance Institute of Canada (IIC) and the Insurance Brokers Association of Ontario (IBAO) offer classes to help you study for the test. Taking these preparatory classes, however, is not mandatory. The Registered Insurance Brokers of Ontario (RIBO) only requires you to pass the province’s licensing exam to get your licence.
This guide on insurance broker courses in Canada gives you a province-by-province breakdown of the different classes you can take.
Depending on the insurance broker candidate’s educational and professional background, they will have to take either the RIBO level 1 exam or the equivalency exam.
Insurance broker candidates have a couple of choices for their licensing exams. For those who are entirely new to the insurance industry, you are advised to take the Level 1 entry exams offered by the RIBO
Aspiring brokers who have experience in the insurance industry, have a licence in another province, or already have an insurance-related designation can take an equivalency exam to qualify for their licence.
You can use this equivalency self-evaluation tool to confirm if you are eligible for this exam.
Once you’ve completed the appropriate course, you must take and pass the RIBO level 1 exam. Note that the passing mark is 60% for each section and 75% for the exam overall. This exam is considered the entry-level licensure exam and is essential for how to become an insurance broker in Ontario. The RIBO level 1 exam encapsulates basic industry concepts, ethics, and insurance products.
After successfully completing the RIBO exam, broker candidates must obtain employment in RIBO-registered brokerage. This must be achieved within a year of passing the exam. Gaining practical work experience is essential for getting your insurance broker license in Canada.
Only after a candidate has secured employment in a brokerage firm and passed the RIBO exam can they submit their application for a broker’s licence.
This part of the process involves presenting proof of education and work experience along with a background check and submitting the necessary documents. Part of this process includes providing your personal information to the Financial Services Regulatory Authority (FSRA).
After getting approved by the FSRA and securing your broker’s licence, you must maintain your general insurance licence by taking continuing education (CE) courses. These courses are required to maintain certain standards expected of brokers in Ontario. CE courses are intended to update brokers on changes in regulations, best practices, and evolving industry standards.
As you embark on your journey to become an insurance broker in the great province of Ontario, you may be confused about the Registered Insurance Brokers of Ontario (RIBO) and the Insurance Brokers Association of Ontario (IBAO). These two organizations are important for Ontario’s local insurance industry and have different roles:
Established by the Ontario government in 1981, RIBO provides resources and policies to help aspiring brokers prepare for the licensing exams. However, its primary function is to regulate the licensing process and monitor the ethical conduct of insurance brokers in Ontario. This organization also has the power to discipline brokers who commit misconduct. RIBO typically cooperates with other organizations like IBAO to administer the RIBO exams.
The Insurance Brokers Association of Ontario, meanwhile, is a non-profit, membership-based organization that works for the interests of brokers and their clients in the province. IBAO provides education, resources, and insurance networking opportunities for its members.
As opposed to RIBO, the IBAO also works to raise public awareness about insurance brokers and the importance of their services. When necessary, IBAO lobbies on behalf of brokers when dealing with government and industry stakeholders.
Here’s a short demonstration video of how to sign up at the IBAO website and begin your journey to becoming an insurance broker in Ontario.
This is the entry-level licence that insurance brokers who are completely new to the industry start on. Licensed brokers with a RIBO level 1 licence are authorized to sell a variety of insurance products, including personal lines like auto and home insurance. To obtain this licence, candidates must:
Keep in mind that a RIBO level 1-licensed broker must work under the supervision of a principal broker.
This licence is suitable for insurance brokers who already have advanced technical and commercial insurance knowledge and experience. Brokers with RIBO level 2 licences still work under a principal broker but have an expanded set of responsibilities and can handle more complex insurance lines.
To secure a RIBO level 2 licence, a broker must have the RIBO level 1 licence and pass the RIBO level 2 exams.
The highest level of RIBO, level 3, is a licence for brokers seeking management positions or who want to set up their own brokerage. Brokers with this licence can hold positions like principal broker, deputy principal broker, or supervising broker. Professionals with this licence typically have extensive experience and considerable knowledge of insurance products and good management practices.
To qualify for this licence, candidates need to have the RIBO level 2 licence along with at least two years of experience as a broker in the past five years. They must also take and pass the level 3 examination. A level 3 licence enables brokers to oversee brokerage operations and ensure compliance with RIBO regulations.
The cost of getting an insurance broker licence in Ontario
There are several associated costs for getting your broker licence in this province. Apart from spending for a good college degree (if you decide to pursue one first), these are the other costs of acquiring a broker licence:
|
Item |
Cost |
|
Broker education program |
$300 to $500 |
|
RIBO level 1 exam fee |
$300 |
|
Licence registration fee |
$220 |
|
Continuing education credits |
$100 to $300 |
|
Licence renewal fees |
$100 to $500 |
In summary, the cost of getting an insurance broker’s licence in Ontario can range from $1,020 to upwards of $1,820. The actual cost will depend on the individual candidate and factors like whether they must take the RIBO level 1 or the equivalency exam, which is priced at only $100.
There are different factors that can affect the average earnings of an insurance broker in Ontario, such as their specialization, the type of brokerage they work for, and their level of experience. On average, an insurance broker can make about $86,000 a year. Here are average salaries for insurance brokers in major cities in Ontario:
|
City |
Average Broker Salary (annually) |
|
Markham |
$59,950 |
|
Mississauga |
$77,584 |
|
Ottawa |
$67,498 |
|
Toronto |
$61,436 |
|
Whitby |
$93,919 |
Yes, insurance brokers are in demand right now in Canada. This demand is attributable to certain factors like:
Surveys have revealed that the Canadian insurance industry is experiencing a shortage of capable workers. Even as far back as before 2020, some HR experts in the industry predicted this shortfall.
In the first half of 2024, there has been a large volume of M&As in the insurance brokerage space, a sign of robust growth in the field. However, these mergers have spiked the need for skilled and experienced brokers to manage client relationships and navigate complex transactions.
Thanks to evolving consumer preferences and rising competition, insurance brokers have become all the more essential. They are needed more now to help clients navigate the complexities of insurance and assist clients in making informed decisions.
As the Canadian economy continues to grow after the recent pandemic, virtually all insurance sectors have likewise seen a spurt in demand. Commercial property and casualty insurance has specifically seen a significant increase. Businesses have increased their demand for brokers who can help protect their assets since the economic recovery and its continuing growth.
Clearly, the demand for insurance brokers is high and will continue to grow as the economy grows. Those aspiring to become insurance brokers, particularly in a robust and dynamic province like Ontario, stand to benefit. Fresh graduates, insurance professionals out to expand their skills and knowledge, or professionals wanting a change may find that an insurance broker career just might suit them.
If you’re on the fence about becoming an insurance broker, does this guide on how to become an insurance broker in Ontario help you make or break your decision? Let us know in the comments.
