A Firm Foundation: How Insurance Supports the Economy

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.

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

Employment

U.S. Department of Commerce data show the insurance industry provided 307,212 jobs in California in 2015. The California insurance industry accounted for about $24.1 billion in compensation in 2015.

Gross State Product

The insurance industry contributed $33.4 billion to the California gross state product (GSP) in 2014, accounting for 1.44 percent of the state GSP.

Taxes

Premium taxes paid by insurance companies in California totaled $2.4 billion in 2015.

Premiums

Direct premiums written by property/casualty insurance companies in California totaled $69.5 billion in 2015. In addition, premiums written by life/health insurance companies totaled $65.5 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 California surplus lines market accounted for $6.9 billion in gross premiums written in 2015, 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 2015 these payments in California as measured by direct property/casualty incurred losses, were $39.5 billion. Life insurance claims and benefits payouts in California totaled $45.7 billion in 2015, 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.

Catastrophes

Insurers help defray the cost of natural disasters. Eight of the 10 most costly U.S. earthquakes occurred in California, topped by the 1994 Northridge earthquake, which caused about $24.5 billion in insured damages in 2015 dollars, according to Munich Re. But in 2016 only 11 percent of California homeowners had earthquake insurance, according to the California Insurance Department.  In August, 2014 a 6.0 magnitude quake occurred in South Napa, California causing $700 million in total damage and $150 million in insured losses. Eight of the 10 costliest wildfires occurred in California, topped by the 1991 Oakland fire, which caused $2.7 billion in insured damages in 2015 dollars, according to the Property Claim Services unit of Verisk. In 2016 California ranked second in the nation for wildfires with 7,349 fires. It also ranked second by number of acres burned with 560,815 acres.

Leading Writers

State By State Comparison Tables

• Employment
• Premiums
• 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

Directories

• State Insurance Departments
• State Organizations

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