The Right State

There are many factors that insurers need to consider when deciding whether to do business or continue to do business in a particular state. A state’s economic condition, legal environment, population growth, and potential untapped markets are just some of the things to consider. A new report from Conning & Co makes the case that personal lines (auto and homeowners) insurers now more than ever need to analyze the key variables between states that affect their potential to make a profit and grow. In Anticipating State Variations in Personal Lines Performance Conning notes that state level factors are always an important part of performance planning in the property/casualty industry, but are increasingly critical in the near-term economic climate. It explains that while the recession has had profoundly different effects on different states, it is very likely the economic recovery will as well. “Exposure growth, pricing, regulatory activity and other key factors have varied widely by state during the recession, and the differences may be dramatic looking forward as well. Some of the hardest charging states prior to the recession were hit very hard, and will take a longer time to climb out, while others may well spike in the coming recovery,† says Conning Research analyst Alan Dobbins in a press release. For more on this story, check out an article by Daniel Hays at National Underwriter. It’s worth noting that insurers play a key role in state economies that goes well beyond their core function of helping to manage risk. Check out state-specific editions of the I.I.I. online publication A Firm Foundation to find out exactly how insurers support the different states.

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