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 40,149 jobs in Alabama in 2018. The Alabama insurance industry accounted for about $2.9 billion in compensation in 2018.

Gross State Product

The insurance industry contributed $4.7 billion to the Alabama gross state product (GSP) in 2017, accounting for 2.24 percent of the state GSP.

Taxes

Premium taxes paid by insurance companies in Alabama totaled $413.8 million in 2019.

Premiums

Direct premiums written by property/casualty insurance companies in Alabama totaled $8.5 billion in 2019. Premiums written by life/annuity insurance companies totaled $8.1 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 Alabama surplus lines market accounted for $603.6 million in gross premiums written in 2018, 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 2019 these payments in Alabama as measured by direct property/casualty incurred losses, were $5.0 billion. Life insurance claims and benefits payouts in Alabama totaled $6.3 billion in 2019.

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. Four of the 10 costliest hurricanes in U.S. history have impacted Alabama: Hurricane Michael in 2018, Hurricanes Irma and Harvey in 2017, and Hurricane Katrina in 2005.

There were 54,348 flood insurance policies in Alabama in 2018.

In Alabama, about 52,000 single-family homes were at risk in 2020 for storm surge damage from hurricanes up to Category 5 strength, according to CoreLogic, Inc. These homes would cost $9.4 billion to completely rebuild, including labor and materials.

Standard homeowners policies typically do not cover flood damage. Flood insurance is covered by the National Flood Insurance Program, but private flood insurance is becoming increasingly available.

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 7th in the nation for the number of tornadoes in 2019 with 95 storms. The state ranked 10th in the nation for the number of wildfires in 2019.

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, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 Travelers Companies Inc. $248,292 6.6%
2 Liberty Mutual 160,252 4.3
3 Chubb 154,583 4.1
4 Auto-Owners Insurance Co. 150,333 4.0
5 CNA 145,014 3.9
6 Zurich 137,079 3.6
7 American International Group (AIG) 130,932 3.5
8 Nationwide Mutual Group 118,437 3.2
9 The Cincinnati Insurance Cos. 114,654 3.0
10 Progressive 102,638 2.7

(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, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $496,918 27.2%
2 Alfa Mutual Group 250,507 13.7
3 Allstate Corp. 218,869 12.0
4 USAA Insurance Group 161,541 8.8
5 Travelers Companies Inc. 83,955 4.6
6 Farmers Insurance Group 79,939 4.4
7 Liberty Mutual 62,671 3.4
8 Auto-Owners Insurance Co. 49,501 2.7
9 Nationwide Mutual Group 45,893 2.5
10 COUNTRY Financial 41,043 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/Annuities In Alabama By Direct Premiums Written, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 Lincoln Financial $328,079 5.3%
2 New York Life 278,407 4.5
3 Jackson 276,395 4.5
4 AIG 265,241 4.3
5 Prudential Financial Inc. 258,956 4.2
6 MassMutual 256,043 4.1
7 John Hancock 224,349 3.6
8 Global Atlantic 208,035 3.4
9 Nationwide 171,359 2.8
10 MetLife 167,489 2.7

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

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

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Top 10 Writers Of Private Passenger Auto Insurance In Alabama By Direct Premiums Written, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $847,370 23.0%
2 Alfa Mutual Group 501,549 13.6
3 Berkshire Hathaway Inc. 414,662 11.2
4 Allstate Corp. 400,960 10.9
5 Progressive 345,091 9.3
6 USAA Insurance Group 275,865 7.5
7 National General Holdings Corp. 115,379 3.1
8 Travelers Companies Inc. 82,966 2.2
9 Liberty Mutual 78,023 2.1
10 Farmers Insurance Group 78,012 2.1

(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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