Auto Insurance Companies Help Bail Out California’s Failing Economy
Wednesday’s Post 12/7/11 – According to a report released by the Insurance Information Institute (III), the insurance industry is a major player and contributor to California’s failing economy. In 2009, property and casualty insurers contributed $34.7 billion to the states Gross State Product. This was almost a 2 percent contribution to the states nearly two trillion-dollar economy. Apart from this, the insurance industry also influences the state’s economy through the following ways:
Job Creation–In California, insurance companies are major employers with almost 300,000
people recruited in 2009. These jobs account for almost $20 billion in remuneration for staff members.
State Revenue and Economy–The insurance industry contributed over $2 billion in direct premium
taxes for 2010. This is nearly 65% higher than what the next leading insurance state contributor forks out
Car Insurance–In California, there are more than 20 million insured cars, trucks and SUV’s.
This is the highest number of insured cars anywhere in the US.
Findings from the report also showed that insurance companies collected about $55 billion from direct premiums in 2010. Nevertheless, the number of claims processed by California’s insurers also has significant impact on the economy of the state. In 2010, property and casualty insurance providers paid out roughly $30 billion in claims to residents. Most of the cases involved damage to property and minor injuries, as a result of tremors and wild-fire. The Golden State is not a stranger to wild fires, the most atrocious being the Oakland fire in 1991, which caused an unprecedented damage of about $1.5 billion.
According to the III report, leading property and automobile insurers in California in terms of direct premiums and market share include:
• Zurich Financial Services LTD (11.8%)
• State Farm Automobile insurance (8.8%)
• Allstate Corporation (4.9%)
• Liberty Mutual ($4.9)
• American International Group (AIG) (4.5%)
• Travelers Companies Inc. (4.1%)
• Auto Club Exchange Group (3.7%)
• AAA Northern California, Nevada and Utah Insurance (3.5%)
• Mercury General Corp (3.5%)
• Nationwide Mutual Group (3.1%)
Michael E. Dortch
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