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.
U.S. Department of Commerce data show the insurance industry provided 98,774 jobs in New Jersey in 2014. The New Jersey insurance industry accounted for about $10.4 billion in compensation in 2014.
GROSS STATE PRODUCT
The insurance industry contributed $20.31 billion to the New Jersey gross state product (GSP) in 2013, accounting for 3.78 percent of the state GSP.
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 $599.2 million in 2014.
Direct premiums written by property/casualty insurance companies in New Jersey totaled $19.7 billion in 2014. In addition, premiums written by life/health insurance companies totaled $28.3 billion (including life insurance, annuities, accident and health insurance, deposit type funds and other considerations).
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 $1.6 billion in gross premiums written in 2014, according to a survey by Business Insurance.
Insurance company claims payments help ensure the economic security of individuals and businesses and help sustain a number of related industries. In 2014 these payments in New Jersey as measured by direct property/casualty incurred losses, were $11.1 billion. Life insurance claims and benefits payouts in New Jersey totaled $21.0 billion in 2014, on a direct basis before reinsurance, and includes life insurance, death benefits, matured endowments, annuity benefits and other life insurance benefits. Does not include accident and health.
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.
LEADING WRITERS OF LIFE INSURANCE AND ANNUITY CONSIDERATIONS IN NEW JERSEY, 2014 (1)
STATE BY STATE COMPARISON TABLES
- Surplus Lines
- Gross State Product
- State Taxes
- Insurance Companies By State
- Catastrophes By State
- Residual Markets
- Captives By State
- Incurred Losses By State
- Insured Cars By State
- Insured Homes By State
- Businesses By State