Mich. study: Industry can be key player in economic recovery

The results of a new study indicate that the insurance industry will lead the state in job creation in the coming decade, resulting in more than 16,000 total new jobs by 2014, helping transition the state to a high-tech 21st century economy and providing a much-needed stabilizing influence on Michigan’s turbulent economy. The study, “Insuring the Future: The Economic Importance of the Insurance Industry in Michigan,” was commissioned by the Michigan Insurance Coalition and underwritten in part by the Life Insurance Association of Michigan.

The new study, conducted by GSP Consulting of Pittsburgh, examined the role Michigan’s insurance industry will play as the state evolves from an industrial-based economy to one that is a leader in technology and services. The study found:

• The insurance industry has been an important, yet undervalued economic growth driver for the state of Michigan.
• Employment in the insurance industry will grow nearly 10 percent by 2014, creating nearly 6,000 new direct jobs and more than 16,000 total jobs dependent on the insurance industry, generating more than $124.9 million in additional state and local tax revenue.
• Employees in Michigan’s insurance industry enjoy a strong standard of living. Wages are above the average for private industries in Michigan and 40 percent pay a median annual salary of $40,000 to $60,000.
• The insurance industry is critical to the stability and growth of Michigan’s economy, helping businesses and individuals financially recover from both minor and catastrophic losses. In 2005, insurers paid nearly $27.6 billion in claims and benefits to Michigan businesses and residents.

“Most people don’t realize the impact Michigan’s insurance industry has on the overall state economy,” said MIC President James Miller. “The purpose of this study is to show that, despite Michigan’s lagging economy, there are bright spots where industries are growing and creating jobs, and insurance is one of those bright spots.”

Miller said this study should be informative for lawmakers as they work this summer to replace Michigan’s Single Business Tax, which is set to expire on Dec. 31, 2007.

According to Bureau of Economic Analysis data, the Michigan insurance industry contributes $7.7 billion to the annual gross state product. Of that, $3.9 billion was in compensation to the more than 56,000 workers employed by the industry.

Source: Michigan Insurance Coalition