When life insurance claims are paid, funds flow into the general economy, as beneficiaries spend the money they receive. When property/casualty (P/C) insurance claims are paid, funds flow to the industries that supply claimants with the goods and services necessary for their recovery.
P/C insurers pay out billions of dollars each year to settle claims. Many of the payments go to businesses, such as auto repair companies, that help claimants get their lives back together after an accident, fire, windstorm or other incident that caused the injury or property damage. Insurance claim payments support local businesses, enabling them to provide jobs and pay taxes that support the local economy.
All industries benefit from P/C insurance because it pays for losses that might otherwise have put them out of business. But certain industries derive a good portion of their income from insurers’ claim payments. These businesses include the auto parts and repair industries (auto insurance), the building construction and supply industries (homeowners and commercial property insurance), healthcare services (auto, workers compensation and other liability insurance coverages) and legal services.
The charts that follow provide some indication of how much insurers contribute to the economy indirectly through some of the industries that provide these services. In addition, P/C insurance claims payments reimburse victims of theft and help make up for loss of income while people who have been injured are recuperating and businesses that have been hit by a disaster prepare to resume operations.