Starting an independent insurance brokerage in Canada may look straightforward on paper, but according to Trevor McIntosh, president of Coverboo Insurance Brokers Inc. and founder of Principal Broker Services, the reality is far more complex. While it’s easy to assume that licenses and startup capital are the biggest hurdles, McIntosh argues that the deeper issues are cultural, structural, and systemic.
“There’s a lot more than just operational barriers,” McIntosh explained. “They’re systemic. You’re facing a lack of guidance, ambiguity in the process, and an industry that doesn’t encourage newcomers. In fact, it often discourages them.”
Capital and Compliance Are Just the Beginning
On the surface, licensing seems achievable. However, in practice, McIntosh describes it as a process wrapped in bureaucratic red tape, made worse by the absence of mentors willing to show the way.
“When I told people I was starting an insurance brokerage, no one encouraged me,” he said. “There’s almost this assumption you’ll fail – or that you’re crazy to try.”
Even though the capital requirements may not be enormous, the real costs start to add up quickly. You’ll need to file regulatory paperwork, secure mandatory insurance, build a compliance framework, and find someone qualified to supervise operations. Moreover, without established relationships in the industry, your progress could stall.
Related: 10 Major Challenges Facing the Modern Insurance Industry
Technology Barriers and Lack of Guidance
Canada’s insurance technology stack remains notoriously outdated and rigid, McIntosh says. That’s why he recommends taking a leaner approach by using flexible, budget-friendly tools like HubSpot or Salesforce.
“You don’t need to default to expensive broker management systems,” he explained. “But the vendor landscape stifles innovation – especially around quoting engines and CRMs.”
What’s even more concerning is the lack of practical, plain-language guidance for aspiring brokers. To help others, McIntosh created a simple, easy-to-understand guide. “The response has been great,” he said. “Brokers don’t realize this path is even available to them.”
Carrier Access: The Biggest Obstacle
Perhaps the most significant structural barrier lies in gaining access to insurance carriers. In Ontario, for instance, brokers are required to present letters of intent from at least two carriers to complete their licensing process.
“That’s where most people hit a wall,” McIntosh said. “The answer is often, ‘Come back when you’ve got a million in premium.’ But how do you get there without anything to sell?”
MGAs (Managing General Agents) are more accessible alternatives, but relying on them alone won’t always cut it. Compounding the issue is the ongoing trend of carrier consolidation. As insurance companies continue to acquire brokerages, they become less willing to support independent startups, especially those they may eventually compete with.
Franchise or banner models, which claim to offer turnkey solutions, often fall short as well. According to McIntosh, “Some are outright predatory. And when you want to strike out on your own, the support disappears.”
Related: Why Farm Insurance in Canada Must Evolve Beyond the Balance Sheet
What Needs to Change to Make Setting Up a Brokerage Firm Easy in Canada?
To foster real change, McIntosh advocates for a centralized national resource hub. This hub should provide transparent, up-to-date information on startup costs, compliance steps, and licensing timelines by province.
“Right now, you’re piecing together outdated PDFs and half-replied emails from different regulators,” he said. “There’s no one place where people can understand the full process.”
He also called out the confusion surrounding carrier commitment letters. “Even some carrier reps don’t understand what they are. That tells you how broken the system is.”
Although regulatory reform would help, McIntosh believes grassroots advocacy is even more urgent.
“If we don’t make noise, we’ll end up with five brokerages controlling the entire market.”
Consumer Preferences Are hifting
Despite the challenges, there is a glimmer of hope. McIntosh sees growing consumer demand for local, independent insurance brokerage firms in Canada that offer personalized service.
“There’s a shift happening. People want to support local businesses,” he said. “When your family-run broker sells to a big chain, you’re just a number overnight.”
To incentivize carrier support for startups, he suggests implementing a certification system that highlights carriers actively partnering with new brokerages.
“Let’s reward those companies that actually support start-up brokerages by working with them and not just talking about it at conferences.”
Related: How Third-Party Litigation Funding Is Shaping the Insurance Sector in Canada
Final Thoughts: Make Room for New Voices
McIntosh’s message to the industry is clear: make space for new ideas and new players.
“If we don’t preserve space for new voices, we lose what made this industry great,” he said. “It used to be about building something from the ground up. It still can be.”
The Canadian insurance landscape won’t evolve overnight. But with more transparency, support, and a commitment to innovation, there’s still time to restore its entrepreneurial roots, and inspire the next wave of independent brokers.
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… I hope this article has been able to give you the necessary clarity?
