California Firm Foundation

KEY FACTS: THE INSURANCE INDUSTRY’S CONTRIBUTION TO THE CALIFORNIA ECONOMY

The insurance industry in California has a significant impact on the state’s economy that extends well beyond its responsibilities to collect premiums and settle claims. It employs licensed professionals, pays taxes, owns municipal bonds and serves people in their times of greatest need.

EMPLOYMENT

U.S. Department of Commerce data show the insurance industry provided 293,807 jobs in California in 2012. The California insurance industry accounted for about $21.2 billion in compensation in 2012.

GROSS STATE PRODUCT

The insurance industry contributed $30.6 billion to the California gross state product (GSP) in 2012, accounting for 1.44 percent of the state GSP.

TAXES

Premium taxes paid by insurance companies in California totaled $2,242.4 million in 2013.

PREMIUMS

Direct premiums written by property/casualty insurance companies in California totaled $56.2 billion in 2012. In addition, premiums written by life/health insurance companies totaled $59.0 billion (including life insurance, annuities, accident and health insurance, deposit type funds and other considerations).

CLAIMS PAYMENTS

Insurance company claims payments help ensure the economic security of individuals and businesses and help sustain a number of related industries. In 2012 these payments in California as measured by direct property/casualty incurred losses, were $32.6 billion. Life insurance claims and benefits payouts in California totaled $41.9 billion in 2012. On a direct basis before reinsurance. Includes life insurance, death benefits, matured endowments, annuity benefits and other life insurance benefits. Does not include accident and health.

SURPLUS LINES

The surplus lines market, a group of highly specialized insurers exists to provide coverage that is not available through licensed insurers in the standard insurance market. For the many thousands of businesses that rely on some level of surplus line protection to keep their doors open, surplus lines is an important segment of the market. The California surplus lines market accounted for $5.1 billion in gross premiums written in 2012, according to a survey by Business Insurance.

CATASTROPHES

Insurers help defray the cost of natural disasters. Six of the 10 most costly U.S. earthquakes occurred in California, topped by the 1994 Northridge earthquake, which caused $24.1 billion in insured damages in 2013 dollars, according to Munich Re. Seven of the 10 largest wildfires also occurred in California, topped by the 1991 Oakland fire, which caused $2.6 billion in insured damages in 2012 dollars, according to ISO. In 2013 California had the highest number of wildfires in the nation, 9,907. These fires burned 577,675 acres, the third-highest state by number of acres burned.

 

THE TEN MOST COSTLY WILDLAND FIRES IN THE UNITED STATES (1)

($ millions)

      Estimated insured loss
Rank Date Location Dollars when occurred In 2012 dollars (2)
1 Oct. 20-21, 1991 Oakland Fire, CA $1,700 $2,622
2 Oct. 21-24, 2007 Witch Fire, CA 1,300 1,412
3 Oct. 25-Nov. 4, 2003 Cedar Fire, CA 1,060 1,299
4 Oct. 25-Nov. 3, 2003 Old Fire, CA 975 1,195
5 Nov. 2-3, 1993 Los Angeles County Fire, CA 375 553
6 Sep. 4-9, 2011 Bastrop County Complex Fire, TX 530 539
7 Oct. 27-28, 1993 Orange County Fire, CA 350 516
8 Jun. 24-28, 2012 Waldo Canyon Fire, CO 450 450
9 Jun. 27-Jul. 2, 1990 Santa Barbara Fire, CA 265 423
10 Sep. 6-13, 2010 Fourmile Canyon Fire, CO 210 218

(1) Property coverage only for catastrophic wildfires. Effective January 1, 1997, Property Claim Services (PCS) defines catastrophes as events that cause more than $25 million in insured property damage and that affect a significant number of insureds and insurers. From 1982 to 1996, PCS used a $5 million threshold in defining catastrophes. Before 1982, PCS used a $1 million threshold.
(2) Adjusted for inflation through 2012 by ISO using the GDP implicit price deflator.

Source: Property Claim Services (PCS), a division of Verisk Analytics.

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TOP TEN STATES FOR WILDFIRES RANKED BY NUMBER OF FIRES AND BY NUMBER OF ACRES BURNED, 2013

Rank State Number of fires Rank State Number of acres burned
1 California 9,907 1 Alaska 1,316,876
2 North Carolina 3,514 2 Idaho 722,204
3 Georgia 2,942 3 California 577,675
4 Oregon 2,848 4 Oregon 350,786
5 Arizona 1,756 5 New Mexico 221,951
6 Montana 1,723 6 Colorado 195,145
7 Washington 1,527 7 Nevada 162,907
8 Idaho 1,471 8 Washington 152,603
9 South Carolina 1,337 9 Montana 124,209
10 Alabama 1,284 10 Arizona 105,281

Source: National Interagency Fire Center.

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THE TEN MOST COSTLY U.S. EARTHQUAKES BY INFLATION-ADJUSTED INSURED LOSSES (1)

($ millions)

        Insured losses (2)  
Rank Date Location Overall losses when occurred When occurred In 2013 dollars (3) Fatalities
1 Jan. 17, 1994 California: Northridge, Los Angeles, San Fernando Valley, Ventura, Orange $44,000 $15,300 $24,050 61
2 Apr. 18, 1906 California: San Francisco, Santa Rosa, San Jose 524 180 4,240 (4) 3,000
3 Oct. 17, 1989 California: Loma Prieta, Santa Cruz, San Francisco, Oakland, Berkeley, Silicon Valley 10,000 960 1,800 68
4 Feb. 28, 2001 Washington: Olympia, Seattle, Tacoma; Oregon 2,000 300 395 1
5 Mar. 27-28, 1964 Alaska: Anchorage, Kodiak Island, Seward, Valdez, Portage, Whittier, Cordova, Homer, Seldovia; Hawaii; includes tsunami 540 45 340 131
6 Feb. 9, 1971 California: San Fernando Valley, Los Angeles 553 35 200 65
7 Oct. 1, 1987 California: Los Angeles, Whittier 360 75 155 8
8 Apr. 4, 2010 California: San Diego, Calexico, El Centro, Los Angeles, Imperial; Arizona: Phoenix, Yuma 150 100 105 NA
9 Sep. 3, 2000 California: Napa 80 50 68 NA
10 Jun. 28, 1992 California: San Bernardino 100 40 66 1

(1) Costliest U.S. earthquakes occurring from 1950 to 2013, based on insured losses when occurred. Includes the 1906 San Francisco, California earthquake, for which reliable insured losses are available.
(2) Based on property losses including, if applicable, agricultural, offshore, marine, aviation and National Flood Insurance Program losses in the United States and may differ from data shown elsewhere.
(3) Inflation-adjusted to 2013 dollars by Munich Re.
(4) Inflation-adjusted to 2013 dollars based on 1913 Bureau of Labor Statistics data (earliest year available).

NA=Data not available.

Source: © 2014 Munich Re, Geo Risks Research, NatCatSERVICE.

 

LEADING WRITERS

 

LEADING WRITERS OF COMMERCIAL PROPERTY/CASUALTY INSURANCE IN CALIFORNIA BY DIRECT PREMIUMS WRITTEN, 2012 (1)

Rank Company/group Direct premiums written ($000) Market share
1 American International Group $1,985,410 6.4%
2 Travelers Companies Inc. 1,959,130 6.3
3 Liberty Mutual 1,917,941 6.2
4 Zurich Insurance Group Ltd. 1,432,516 4.6
5 Farmers Insurance Group of Cos. 1,318,613 4.2
6 Hartford Financial Services 1,187,576 3.8
7 Chubb Corp. 1,018,586 3.3
8 Nationwide Mutual Group 908,002 2.9
9 State Compensation Insurance Fund 903,787 2.9
10 ACE Ltd. 823,558 2.7

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF PRIVATE PASSENGER AUTO INSURANCE IN CALIFORNIA BY DIRECT PREMIUMS WRITTEN, 2012 (1)

Rank Company/group Direct premiums written ($000) Market share
1 Farmers Insurance Group of Companies $2,718,373 14.0%
2 State Farm Mutual Automobile Insurance 2,687,823 13.8
3 Allstate Corp. 1,745,215 9.0
4 Auto Club Exchange Group 1,688,450 8.7
5 Mercury General Corp. 1,642,475 8.5
6 AAA Northern CA NV & Utah Insurance 1,365,514 7.0
7 Berkshire Hathaway Inc. 1,124,482 5.8
8 USAA Insurance Group 833,019 4.3
9 Progressive Corp. 799,498 4.1
10 Liberty Mutual 694,761 3.6

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF EARTHQUAKE INSURANCE IN CALIFORNIA BY DIRECT PREMIUMS WRITTEN, 2012 (1)

Rank Company/group Direct premiums written ($000) Market share
1 CA Earthquake Authority $566,664 34.8%
2 Zurich Insurance Group Ltd. 143,902 8.8
3 GeoVera Insurance Holdings Ltd. 100,336 6.2
4 AXIS Capital Holdings Ltd. 73,823 4.5
5 American International Group 65,787 4.0
6 ACE Ltd. 51,975 3.2
7 Endurance Specialty Holdings 43,240 2.7
8 Chubb Corp. 42,895 2.6
9 Arch Capital Group Ltd. 41,237 2.5
10 ICW Group 40,980 2.5

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF HOMEOWNERS INSURANCE IN CALIFORNIA BY DIRECT PREMIUMS WRITTEN, 2012 (1)

Rank Company/group Direct premiums written ($000) Market share
1 State Farm Mutual Automobile Insurance $1,555,280 22.1%
2 Farmers Insurance Group of Companies 1,165,660 16.6
3 Allstate Corp.  632,179 9.0
4 AAA Northern CA NV & Utah Insurance 463,207 6.6
5 Liberty Mutual  388,213 5.5
6 Auto Club Exchange Group  362,696 5.2
7 USAA Insurance Group  323,968 4.6
8 Nationwide Mutual Group  258,012 3.7
9 Mercury General Corp.  241,950 3.4
10 Travelers Companies Inc.  235,349 3.3

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF WORKERS' COMPENSATION INSURANCE IN CALIFORNIA BY DIRECT PREMIUMS WRITTEN, 2012 (1)

Rank Company/group Direct premiums written ($000) Market share
1 State Compensation Insurance Fund $903,787 10.0%
2 Travelers Companies Inc. 682,812 7.6
3 Hartford Financial Services 663,597 7.4
4 Berkshire Hathaway Inc. 656,926 7.3
5 American International Group 497,493 5.5
6 Zurich Insurance Group Ltd. 483,242 5.4
7 Fairfax Financial Holdings 449,017 5.0
8 Liberty Mutual 420,831 4.7
9 Employers Insurance Group 341,281 3.8
10 ICW Group 284,938 3.2

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF LIFE INSURANCE AND ANNUITY CONSIDERATIONS IN CALIFORNIA BY DIRECT PREMIUMS WRITTEN, 2012 (1)

Rank Group Direct premiums written ($000) Market share
1 Prudential Financial Inc. $5,664,501 12.4%
2 MetLife Inc. 2,727,272 6.0
3 Manulife Financial Corp. 2,499,886 5.5
4 Jackson National Life Group 2,418,694 5.3
5 AEGON NV 2,366,589 5.2
6 Lincoln National Corp. 2,039,273 4.5
7 New York Life Insurance Group 2,031,797 4.5
8 American International Group 1,556,327 3.4
9 ING U.S., Inc. 1,405,104 3.1
10 Principal Financial Group Inc. 1,244,158 2.7

(1) Includes life insurance, annuity consideration, deposit-type contract funds, other considerations; excludes accident and health insurance from life/health insurers. Before reinsurance transactions.

Source: SNL Financial LC.

 

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