Insurance companies are a high driver in Michigan’s economy, according to a recent report.
The report, titled “A Firm Foundation: How Insurance Supports the Economy,” found insurance companies in Michigan employed more than 83,000 people and paid more than $6 billion in wages in 2018. The insurance industry as a whole donates more than $500 million to charity every year.
“This report shows what we’ve known for years: Insurance Alliance of Michigan member companies and their agents are highly regarded in their communities, provide good jobs and pump billions of dollars back into the economy,” said Tricia Kinley, executive director of the Insurance Alliance of Michigan.
Kinley added IAM members donate over $44 million to local charities and provide free car seats and car seat inspections to ensure passenger safety.
Michigan is home to 65 property/casualty insurance companies and 22 life/annuities companies. According to Insurance Information Institute data, some of the top writers of auto insurance, homeowners insurance and business insurance are among IAM’s members, including State Farm, AAA, Auto-Owners, Allstate, Hanover and more.
According to the report, Michigan insurance companies paid $337,254 in state taxes in 2017, out of the total $21,001,801 in state taxes nationwide for the same year. The state where insurance companies paid the highest amount of state taxes was California with $2,422,105. Numbers are based on U.S. Department of Commerce and Bureau of the Census data.
Michigan is home to 127 domestic licensed insurers as of 2017, with another 1,362 insurers licensed in another state. Including chartered self-insured groups and chartered purchasing groups, there are 1,515 companies overall doing business in Michigan.
The report also provided state catastrophe rankings, followed by information on the following types of disasters: hailstorms, hurricanes, tornadoes and wildfires. ISO defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of property/casualty policyholders and insurers.
According to the report, while hurricanes and earthquakes tend to produce greater losses, tornadoes account for a major share of catastrophe losses because of their frequency.
In 2017, Michigan had 11 tornados, resulting in no fatalities. Texas had the most tornados the same year, with 176 that resulted in four deaths.
Michigan also had 431 wildfires, resulting in 3,786 acres burned in 2018. Comparatively, Texas had 10,541 recorded wildfires that resulted in 569,811 acres burned in the same year. While California had fewer individual fires (8,054), the damage was greater, with 1,823,153 acres burned.
According to the report, property/casualty insurers across the U.S. pay out billions of dollars each year to settle claims. Many of the payments go to businesses like auto repair companies, which 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, the report said.
Michigan property/casualty insurance companies incurred $12,262,443 in losses in 2017, according to the report. Both California and Texas remained high on the list with $58,112,010 and $50,725,857 in incurred losses, respectively.