The U.S. Census Bureau’s Census 2000 estimated the population of the state of Massachusetts at 6,379,304. Approximately 85 percent of the adult residents residing in the state had graduated from high school and more than 33 percent had earned a bachelor’s degree. Boston, Mass., accounted for 589,141 of the state’s population.
From an employment perspective, the primary industries in Massachusetts are:
From a property/casualty insurance perspective, Massachusetts accounted for $10,356,721,000 of direct written premium. As of Sept. 30, 2003, the aggregate for property/casualty insurance written countrywide was $313,781,216,000. Massachusetts’ calendar year 2002 loss ratio of 60 percent was slightly below the countrywide year-to-date Sept. 30, 2003, loss ratio of 62.3 percent.
Despite the competitive pressures in the Massachusetts insurance marketplace and the rigorous scrutiny that the Massachusetts Department of Insurance applies to rate level revisions, we expect Massachusetts’ loss ratios to approximate the countrywide average when calendar year 2003 information becomes available. Insurers will continue to rely on aggressive pricing and focused underwriting to maintain loss ratios at acceptable levels.
Similarly, we expect the Massachusetts economy to continue to grow and diversify. The employed civilian population comprises nearly half of the Commonwealth’s population. It is distributed as follows:
Given the anticipated growth in the number of jobs located in Massachusetts and the diversification of the Massachusetts economy, I would expect the growth rate of Massachusetts’ P/C insurance marketplace, as measured by direct premium written, to approximate the growth rate in states of comparable population and economic diversification.
Joseph L. Petrelli is president and founder of Demotech Inc., a Columbus, Ohio-based financial analysis and actuarial services firm. Petrelli is a member of the Casualty Actuarial Society, American Academy of Actuaries and the Conference of Actuaries in Public Practice. Additional information can be found at www.demotech.com.
Topics Massachusetts Property Casualty
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