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.

Employment

U.S. Department of Commerce data show the insurance industry provided 322,897 jobs in California in 2016. The California insurance industry accounted for about $26.2 billion in compensation in 2016.

Gross State Product

The insurance industry contributed $35.3 billion to the California gross state product (GSP) in 2015, accounting for 1.42 percent of the state GSP.

Taxes

Premium taxes paid by insurance companies in California totaled $2.6 billion in 2016.

Premiums

Direct premiums written by property/casualty insurance companies in California totaled $73.1 billion in 2016. In addition, premiums written by life/health insurance companies totaled $65.1 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 California surplus lines market accounted for $8.2 billion in gross premiums written in 2016, 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 California as measured by direct property/casualty incurred losses, were $42.6 billion. Life insurance claims and benefits payouts in California totaled $44.6 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. California is vulnerable to earthquakes, wildfires and landslides.

Eight of the 10 costliest 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.

In October 2017, eight counties in northern California were hit by a devastating outbreak of wildfires which led to at least 23 fatalities, burned 245,000 acres and destroyed over 8,700 structures. AIR estimated that insured losses from the fires would be between $2 billion and $3 billion. The California Department of Insurance said that as of October 26, losses reported from 15 major insurers totaled $3.3 billion, including residential and commercial property, personal and commercial auto, agriculture and watercraft.

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 California By Direct Premiums Written, 2016 (1)

Rank Group/company Direct premiums written ($000) Market share
1 Chubb Ltd. $2,389,627 6.1%
2 Liberty Mutual 2,077,863 5.3
3 Travelers Companies Inc. 2,063,142 5.2
4 American International Group (AIG) 1,899,910 4.8
5 Berkshire Hathaway Inc. 1,834,454 4.6
6 Zurich Insurance Group (2) 1,704,770 4.3
7 State Compensation Insurance Fund 1,613,212 4.1
8 AmTrust Financial Services 1,539,612 3.9
9 Farmers Insurance Group of Companies (2) 1,497,303 3.8
10 Hartford Financial Services 1,242,456 3.1

(1) Before reinsurance transactions.
(2) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by S&P Global Market Intelligence.

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

View Archived Tables

Top 10 Writers Of Earthquake Insurance In California By Direct Premiums Written, 2016

Rank Group/company Direct premiums written (1) ($000) Market share
1 California Earthquake Authority $621,549 38.3%
2 Zurich American Insurance Co. 117,530 7.3
3 Chubb Ltd. 102,262 6.3
4 GeoVera Holdings 86,665 5.3
5 American International Group (AIG) 77,832 4.8
6 Everest Re Group Ltd. 57,794 3.6
7 Palomar Specialty Insurance Co. 44,998 2.8
8 Swiss Re AG  42,219 2.6
9 Travelers Companies Inc. 34,754 2.1
10 ICW Group 29,529 1.8

(1) Before reinsurance transactions, includes state funds.
(2) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by S&P Global Market Intelligence.

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

View Archived Tables

Top 10 Writers Of Homeowners Insurance In California By Direct Premiums Written, 2016 (1)

Rank Group/company Direct premiums written ($000) Market share
1 State Farm Mutual Automobile Insurance $1,504,930 19.5%
2 Farmers Insurance Group of Companies (2) 1,246,135 16.2
3 CSAA Insurance Exchange 514,101 6.7
4 Allstate Corp.  493,412 6.4
5 Auto Club Exchange Group 483,982 6.3
6 Liberty Mutual 453,302 5.9
7 USAA Insurance Group 359,418 4.7
8 Mercury General Corp. 352,599 4.6
9 Nationwide Mutual Group 328,058 4.3
10 Travelers Companies Inc. 238,481 3.1

(1) Before reinsurance transactions.
(2) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by S&P Global Market Intelligence.

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

View Archived Tables

Top 10 Writers Of Life Insurance And Annuity Considerations In California, 2015 (1)

 

Rank Group/company Premiums and annuity considerations ($000) Market share
1 Prudential Financial Inc.   $3,872,169 7.6%
2 AEGON   3,301,142 6.4
3 New York Life Insurance Group   2,799,781 5.5
4 Jackson National Life Group   2,646,364 5.2
5 American International Group (AIG)   2,508,141 4.9
6 Manulife Financial Corp.   2,311,911 4.5
7 MetLife Inc.   2,263,474 4.4
8 Lincoln National Corp.   2,096,772 4.1
9 Voya Financial Inc.   1,887,780 3.7
10 Principal Financial Group Inc.   1,814,064 3.5

(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 California By Direct Premiums Written, 2015 (1)

Rank Group/company Direct premiums written ($000) Market share
1 State Farm Mutual Automobile Insurance $3,655,463 14.5%
2 Farmers Insurance Group of Companies (2) 3,051,681 12.1
3 Allstate Corp.  2,204,330 8.7
4 Berkshire Hathaway Inc. 2,091,720 8.3
5 Auto Club Exchange Group 2,042,123 8.1
6 Mercury General Corp. 2,035,971 8.1
7 CSAA Insurance Exchange 1,691,525 6.7
8 USAA Insurance Group 1,127,170 4.5
9 Progressive Corp. 1,017,900 4.0
10 Liberty Mutual 846,362 3.4

(1) Before reinsurance transactions.
(2) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by S&P Global Market Intelligence.

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

View Archived Tables

State By State Comparison Tables

Directories

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