Insurance good for financial security, great for
SEATTLE - Insurance provides financial security for millions
of Washington residents and makes a major contribution to the
economy across the Northwest. At the most fundamental level, insurance
is the foundation for economic interaction and nearly all commerce.
New data released by the American Insurance Association shows
the insurance industry in Washington is a key part of the state's
"Insurance makes it possible to buy a car or a home, start a
small business and build communities, said Karl Newman, president,
NW Insurance Council. "Insurance also provides quality employment
opportunities to thousands of Washingtonians."
Among businesses, insurance companies are the second highest
contributor to the Washington State General Fund. The insurance
industry contributed more than $5.2 billion to the Washington
State gross state product (GSP) in 2007, accounting for two percent
of the state GSP.
Insurance companies headquartered both here and in other states,
employed 50,727 Washington residents in 2007 and brought more
than $3.2 billion in payroll income into state and local economies,
according to the U.S. Bureau
of Labor Statistics.
In 2008, insurers paid more than $415 million in premium taxes
to Washington State government, including primary funding for
the State Fire Marshal's Office.
"Insurers help fuel Washington's economy," said Newman. "Insurance
companies doing business in Washington help make state and local
projects a reality by purchasing a significant number of municipal
Insurer premium taxes and bond investments directly finance construction
and maintenance of critical public services such as roads and
bridges, schools and affordable housing.
Property & Casualty (P&C) insurers purchased $14.6 billion in
Washington municipal bonds in 2005. That equals 31percent of outstanding
government debt throughout the state. Washington was fifth among
all states in municipal bond investments by P&C insurers, despite
ranking only 18th in the nation in total P&C premium volume.
Only Texas, California, New York, and Illinois ranked higher
than Washington. In fact, Washington led all 50 states in the
ratio of municipal bond investments to direct written premiums,
with P&C insurers investing 1.6 times more in municipal bonds
than they collected in premiums in the state ($13.7 billion to
$8.6 billion respectively for 2005, according to A.M. Best data).
Property/casualty insurance companies doing business in Washington
totaled $9.1 billion in direct premiums written. In addition,
life/health insurers totaled nearly $10.7 billion (including life
insurance, annuities, accident and health insurance, deposit type
funds and other considerations).
"Perhaps most importantly, insurance companies are there when
policyholders need them most - helping Northwest residents recover
from accidents, illnesses and other personal and commercial insured
losses," Newman said.
In 2008, P&C insurers paid $5.0 billion to Washington residents
and businesses, including $2.2 billion for auto losses, $1.9 billion
for commercial losses and more than $724 million for homeowners'
claims. Life insurance claims and befits payouts in Washington
totaled $7.8 billion in 2008.
Insurance claim payments support local businesses, enabling them
to provide jobs and pay taxes that support the local economy.
These businesses include the auto parts and repair industries,
the building construction and supply industries, health care services
and legal services.
For more on how insurance companies support local and state economies,
"A Firm Foundation:
How Insurance Supports the Washington State Economy or contact
NW Insurance Council
at (800) 664-4941.
Sources: American Insurance Association, A.M. Best, Insurance
Information Institute and U.S. Census Bureau.
NW Insurance Council is a nonprofit, public-education organization
funded by member insurance companies serving Washington, Oregon