A Firm Foundation: How Insurance Supports the Economy

Key Facts: The Insurance Industry’s Contribution To The Alabama Economy

The insurance industry in Alabama 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 39,524 jobs in Alabama in 2017. The Alabama insurance industry accounted for about $2.9 billion in compensation in 2017.

Gross State Product

The insurance industry contributed $4.1 billion to the Alabama gross state product (GSP) in 2015, accounting for 2.06 percent of the state GSP.

Taxes

Premium taxes paid by insurance companies in Alabama totaled $317.7 million in 2016.

Premiums

Direct premiums written by property/casualty insurance companies in Alabama totaled $8.0 billion in 2016. In addition, premiums written by life/health insurance companies totaled $7.3 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 Alabama surplus lines market accounted for $554.0 million in gross premiums written in 2017, 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 2016 these payments in Alabama as measured by direct property/casualty incurred losses, were $4.7 billion. Life insurance claims and benefits payouts in Alabama totaled $5.4 billion in 2016.

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. The total value of insured coastal property in Alabama was $118.2 billion in 2012, accounting for 13 percent of the state’s total insurance property exposure, according to AIR Worldwide Corporation. Three of the 10 costliest hurricanes in U.S. history have impacted Alabama: hurricanes Katrina and Rita in 2005 and Hurricane Ivan in 2004. Alabama is also prone to tornadoes and wildfires. In April 2011 a devastating outbreak of tornadoes in Tuscaloosa killed 238 and destroyed 5,300 homes. Alabama ranked 3rd in the nation for the number of tornadoes in 2016 with 87 storms. The state ranked fifth in the nation for the number of wildfires.

Leading Writers

Below are tables showing the state’s leading insurance companies, based on market share, and links to state by state comparison tables.

Top 10 Writers Of Commercial Insurance In Alabama By Direct Premiums Written, 2018 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 Travelers Companies Inc. $230,304 6.6%
2 Zurich 146,002 4.2
3 Liberty Mutual 143,981 4.2
4 Chubb 143,929 4.2
5 Auto-Owners Insurance 142,428 4.1
6 CNA 139,035 4.0
7  American International Group (AIG) 117,351 3.4
8 Nationwide Mutual Group 113,186 3.3
9 The Cincinnati Insurance Cos. 106,127 3.1
10 Progressive 86,526 2.5

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Homeowners Insurance In Alabama By Direct Premiums Written, 2018 (1)

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $490,816 28.2%
2 Alfa Mutual Group 235,417 13.5
3 Allstate Corp. 205,513 11.8
4 USAA 143,294 8.2
5 Farmers Insurance Group of Companies 84,392 4.8
6 Travelers 72,923 4.2
7 Liberty Mutual 61,479 3.5
8 Nationwide 46,094 2.6
9 Auto-Owners Insurance 44,369 2.5
10 COUNTRY Financial 38,246 2.2

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Life Insurance And Annuity Considerations In Alabama, 2016 (1)

Rank Group/company Premiums and annuity considerations ($000) Market share
1 Prudential Financial Inc. $320,668 5.6%
2 New York Life Insurance Group 317,119 5.5
3 Jackson National Life Group 251,656 4.4
4 American International Group (AIG) 244,049 4.2
5 Massachusetts Mutual Life Insurance Co. 212,837 3.7
6 Lincoln National Corp. 198,907 3.4
7 John Hancock Life Insurance Co. 179,120 3.1
8 Northwestern Mutual Life Insurance Co. 174,222 3.0
9 MetLife Inc. 166,840 2.9
10 Nationwide Mutual Group 166,609 2.9

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

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Private Passenger Auto Insurance In Alabama By Direct Premiums Written, 2018 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $845,280 23.7%
2 Alfa Mutual Group 503,354 14.1
3 Berkshire Hathaway Inc. 386,216 10.8
4 Allstate Corp. 370,610 10.4
5 Progressive 283,343 8.0
6 USAA 263,029 7.4
7 National General Holdings Corp. 103,441 2.9
8 Nationwide 85,476 2.4
9 Liberty Mutual 83,695 2.3
10 Farmers Insurance 81,996 2.3

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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State By State Comparison Tables

Directories

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