To The Reader

Insurance affects everything and everything affects insurance. It is generally understood that insurance allows those who participate in the economy to produce goods and services without the paralyzing fear that some adverse incident could leave them destitute or unable to function. However, few people are aware of the extraordinary impact the industry has on state, local and national economies.

To explain the ways that both property/casualty and life insurance contribute to our economy far beyond their core function of helping to manage risk, the Insurance Information Institute has produced a website, A Firm Foundation: How Insurance Supports the Economy (, which is updated frequently. This PDF version includes the entire contents of this unique resource.

The insurance industry is a major U.S. employer, providing some 2.3 million jobs that encompass a wide variety of careers, from human resource administrators to public relations managers to financial analysts.

Insurance companies also help support the economy through their investments. As part of the financial services industry, insurers act as financial intermediaries, investing the funds they collect for providing insurance protection. The insurance industry (property/casualty and life/health) is a key player in the capital markets, with $7.0 trillion in financial assets in 2012, including $1.4 trillion held by property/casualty insurers and $5.6 trillion held by life insurers, according to data from the Federal Reserve Flow of Funds.

Insurers contributed $413 billion to the nation’s gross domestic product in 2012. Their taxes include special levies on insurance premiums. Insurance companies, including life/health and property/casualty companies, paid $16.7 billion in premium taxes to the 50 states in 2012. On a per capita basis, this works out to $53 for every person living in the United States.

This publication shows the myriad ways in which insurance supports the economy. Each chart illustrates one or more elements. Together they tell a tale that is rarely told—that insurance helps provide the firm foundation for a functioning economy.