Tax costs insurance industry 67%

The Canadian P&C industry pays the highest total tax and regulatory costs in the world.
According to a new report, released today, April 22, 2010, by PricewaterhouseCoopers, at the IBC Financial Symposium in Toronto, the rate of taxes and regulations costs paid by our country’s P&C industry is 67%.

The PwC report was commissed by the Insurance Bureau of Canada (IBC) in 2008.

Findings included the industry:

  • Is a major contributor to the Canadian provincial and federal tax regimes with a total tax contribution of $6.2bn, and
  • Bears and collects selected taxes and regulatory costs which represent 13.8% of the average insurance policy premium paid by consumers.

The study found the total taxes borne by the industry in 2008 were $4.3 billion (CDN), of which $600,000 was income taxes.

“This means that for each $1 of income taxes the industry paid, it absorbed an additional $5.63 in other taxes,” the report authors stated.

“The other segment of the total tax contribution made by the industry relates to $1.9 billion of taxes collected by industry members in 2008 on behalf of various provincial and federal governments and agencies.”

The study also found the industry is a significant Canadian employer.

In 2008 the domestic P&C industry employed almost 42,000 people, earning total salaries and wages of about $2.4 billion, with an average of $57,000 per employee.  The national average salary (for all industries) is $38,000.

Originally published on CITopBroker.com on April 22, 2010