Ohio P/C Market Should Keep Pace With Countrywide Patterns

The U.S. Census Bureau’s 2000 census estimated Ohio’s population at 11.4 million. About 83 percent of the adult residents had graduated from high school and about 21 percent had earned a bachelor’s degree or higher. The capital, Columbus, has a population of 711,470.

From an employment perspective, the primary industries in Ohio are:

From a property/casualty perspective, Ohio accounted for nearly $17 million in direct written premium. Nationally as of Sept. 30, 2003 the aggregate was $313.8 million in P/C insurance written. The Ohio calendar-year 2002 loss ratio of 74.4 percent was above the national year-to-date Sept. 30, 2003, loss ratio of 62.3 percent. Ohio’s State Insurance Fund for workers’ compensation coverage is monopolistic.

Ohio is home to numerous P/C insurers, from international giant Nationwide to Progressive to Grange Mutual, Motorist Mutual, State Auto and other super regionals. In this competitive, price-sensitive marketplace, we would expect loss ratios to be higher than the national average.

The Ohio economy is robust and diversified. The employed civilian population comprises nearly half of the Buckeye state’s population. It is distributed as follows:

Given the anticipated growth in the number of jobs located in Ohio, the diversification of the state’s economy and the competitive marketplace, I would expect the growth rate of Ohio’s P/C marketplace, as measured by direct premium written, to approximate the growth rate experienced on a national basis.

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 Ohio Property Casualty