New Jersey Firm Foundation

KEY FACTS: THE INSURANCE INDUSTRY’S CONTRIBUTION TO THE NEW JERSEY ECONOMY

The insurance industry in New Jersey 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 98,339 jobs in New Jersey in 2012. The New Jersey insurance industry accounted for about $9.6 billion in compensation in 2012.

GROSS STATE PRODUCT

The insurance industry contributed $20.3 billion to the New Jersey gross state product (GSP) in 2012, accounting for 3.84 percent of the state GSP.

TAXES

All insurance companies pay a state tax based on their premiums. Other payments are made to states for licenses and fees, income and property taxes, sales and use taxes, unemployment compensation taxes and franchise taxes. Premium taxes paid by insurance companies in New Jersey totaled $568.5 million in 2013.

PREMIUMS

Direct premiums written by property/casualty insurance companies in New Jersey totaled $17.6 billion in 2012. In addition, premiums written by life/health insurance companies totaled $28.1 billion (including life insurance, annuities, accident and health insurance, deposit type funds and other considerations).

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 New Jersey surplus lines market accounted for $1.3 billion in gross premiums written in 2012, according to a survey by Business Insurance.

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 New Jersey as measured by direct property/casualty incurred losses, were $17.9 billion. Life insurance claims and benefits payouts in New Jersey totaled $18.2 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.

CATASTROPHES

The insurance industry plays a vital role in helping individuals and businesses prepare for and recover from the potentially devastating effects of a disaster such as a catastrophic hurricane or storm or wildfire. New Jersey suffered damage in two of the top ten costliest hurricanes: Hurricane Ivan in 2004 and Hurricane Sandy in 2012. Hurricane Sandy caused extensive damage in New Jersey as well as to New York, Pennsylvania and Connecticut. Sandy caused 72 deaths in the U.S. and $18.75 billion in insured property losses in 15 states and the District of Columbia, not including National Flood Insurance Program (NFIP) losses, according to the Property Claim Services (PCS) unit of ISO. This makes it the third costliest U.S. hurricane, topped only by Hurricane Katrina in 2005 and Hurricane Andrew in 1992.

 

THE TEN MOST COSTLY HURRICANES IN THE UNITED STATES (1)

($ millions)

        Estimated insured loss (2)
Rank Date Location Hurricane Dollars when
occurred
In 2013
dollars (3)
1 Aug. 25-30, 2005 AL, FL, GA, LA, MS, TN Hurricane Katrina $41,100 $47,622
2 Aug. 24-26, 1992 FL, LA Hurricane Andrew 15,500 23,386
3 Oct. 28-31, 2012 CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV
Hurricane Sandy 18,750 19,033
4 Sep. 12-14, 2008 AR, IL, IN, KY, LA, MO, OH, PA, TX Hurricane Ike 12,500 13,426
5 Oct. 24, 2005 FL Hurricane Wilma 10,300 11,934
6 Aug. 13-14, 2004 FL, NC, SC Hurricane Charley 7,475 8,939
7 Sep. 15-21, 2004 AL, DE, FL, GA, LA, MD, MS, NC, NJ,
NY, OH, PA, TN, VA, WV
Hurricane Ivan 7,110 8,502
8 Sep. 17-22, 1989 GA, NC, PR, SC, UV, VA Hurricane Hugo 4,195 6,937
9 Sep. 20-26, 2005 AL, AR, FL, LA, MS, TN, TX Hurricane Rita 5,627 6,520
10 Sep. 3-9, 2004 FL, GA, NC, NY, SC Hurricane Frances 4,595 5,495

(1) Includes hurricanes occurring through 2013.                    
(2) Property coverage only. Does not include flood damage covered by the federally adminstered National Flood Insurance Program.                    
(3) Adjusted for inflation through 2013 by ISO using the GDP implicit price deflator.                    
                    
Source: The Property Claim Services® (PCS®) unit of ISO, a Verisk Analytics company.

 

LEADING WRITERS

 

LEADING WRITERS OF HOMEOWNERS INSURANCE IN NEW JERSEY BY DIRECT PREMIUMS WRITTEN, 2013 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm Mutual Automobile Insurance $300,058 12.7%
2 Liberty Mutual 213,231 9.1
3 Allstate Corp. 212,039 9.0
4 NJ Manufacturers Insurance Co 193,253 8.2
5 Chubb Corp. 164,968 7.0
6 Plymouth Rock Co. 127,640 5.4
7 Travelers Companies Inc. 125,238 5.3
8 American Family Mutual 89,461 3.8
9 USAA Insurance Group 88,624 3.8
10 Franklin Mutual Insurance Co. 74,476 3.2

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF COMMERCIAL INSURANCE IN NEW JERSEY BY DIRECT PREMIUMS WRITTEN, 2013 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 NJ Manufacturers Insurance Co. $605,473 6.3%
2 Travelers Companies Inc. 600,285 6.3
3 Liberty Mutual 585,119 6.1
4 American International Group 571,529 6.0
5 Hartford Financial Services 490,544 5.1
6 Zurich Insurance Group 426,804 4.5
7 Selective Insurance Group Inc. 380,947 4.0
8 Berkshire Hathaway Inc. 358,282 3.8
9 Chubb Corp. 338,593 3.6
10 CNA Financial Corp. 314,107 3.3

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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LEADING WRITERS OF PRIVATE PASSENGER AUTO INSURANCE IN NEW JERSEY BY DIRECT PREMIUMS WRITTEN, 2013 (1)

Rank Group/company Direct premiums written ($000) Market share
1 Berkshire Hathaway Inc. $1,117,442 16.4%
2 Allstate Corp. 939,226 13.8
3 NJ Manufacturers Insurance Co. 926,316 13.6
4 Progressive Corp. 622,806 9.1
5 State Farm Mutual Automobile Insurance 595,864 8.7
6 Plymouth Rock Co. 539,052 7.9
7 Liberty Mutual 524,584 7.7
8 USAA Insurance Group 233,209 3.4
9 Travelers Companies Inc. 228,815 3.4
10 Farmers Insurance Group of Cos. 194,420 2.9

(1) Before reinsurance transactions.

Source: SNL Financial LC.

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

Rank Group Direct premiums written ($000) Market share
1 Prudential Financial Inc. $5,322,222 23.4%
2 MetLife Inc. 2,045,001 9.0
3 Guggenheim Capital LLC 1,898,055 8.4
4 Jackson National Life Group 1,001,122 4.4
5 AXA 989,471 4.4
6 American International Group 792,175 3.5
7 Lincoln National Corp. 791,621 3.5
8 AEGON NV 746,505 3.3
9 Manulife Financial Corp. 667,638 2.9
10 New York Life Insurance Group 604,896 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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