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.
The insurance industry is a major U.S. employer, providing some 2.5 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 industry’s financial assets were about $6 trillion in 2013, including $1.2 trillion for the property/casualty sector and $4.7 trillion for the life sector.
Insurers contributed more than $421 billion to the nation’s gross domestic product in 2013. Their taxes include special levies on insurance premiums, which amounted to about $17.4 billion in 2013, or about 2 percent of all taxes collected by the 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.