Posted on 15 Apr 09
Earlier this year, the Insurance Information Institute (III) released a 54-page report showing the insurance industry’s significant impact on the state of New York. The report shows that the impact extends well beyond its responsibilities to collect premiums and settle claims, to employing licensed professionals, paying taxes, owning municipal bonds and serving people in their times of greatest need.
We thought we would share some of the highlights of the report with you, in light of all the talk these several months about the impact of Wall Street and the banking industry on New York’s employment and beyond. What’s more, there are state comparisons in the report, showing the impact the industry has nationwide.
U.S. Bureau of Labor Statistics data show the insurance industry provided 185,858 jobs in New York in 2007, accounting for nearly $17.2 billion in compensation.
GROSS STATE PRODUCT
The insurance industry contributed over $24.4 billion to the New York gross state product (GSP) in 2006, accounting for 2.4 percent of the state GSP.
Premium taxes paid by insurance companies in New York totaled $1.17 billion in 2007.
Insurance companies invest the premiums they collect in state and local municipal bonds, helping to fund the building of roads, schools and other public projects. They provide businesses with capital for research, expansions and other ventures through their investments in corporate equities and bonds. According to a 2007 Insurance Research Council study, property/casualty insurers held over $22 billion in New York State municipal bonds in 2005, with transportation projects accounting for the largest share, or 26 percent of the total combined value of all municipal bonds held by insurers in the state.
Direct premiums written by property/casualty insurance companies in New York totaled $35.2 billion in 2007. In addition, life/health and annuity premiums totaled $61.5 billion.
Insurance company claims payments help ensure the economic security of individuals and businesses and help sustain a number of related industries. In 2007 these payments in New York, as measured by direct property/casualty incurred losses, reached nearly $20.9 billion. Life insurance claims and benefits payouts in New York totaled over $36.5 billion in 2007.
New York is vulnerable to hurricanes, ranking as one of the top ten states at risk of hurricanes, based on the insured value of coastal properties, according to an analysis by AIR Worldwide. New York’s dense population and reputation as a financial center also make it a key target for terrorists. Insured property losses from the September 11, 2001 terrorist attacks on the World Trade Center in New York City and the Pentagon in
Washington, D.C. totaled about $22 billion, according to ISO.
For the full report and to see how other states fare in comparison with New York, just take a look at the attached pdf file, “HOW INSURANCE SUPPORTS THE ECONOMY – NY”.