Signs Point to Growth This Year
It’s looking like 2011 should be an interesting year in the insurance world, with Republicans in Congress aiming to take down the new health insurance reform laws and states trying to figure out how to deal with the new regulations concerning surplus line premium taxes. And let’s not forget about the economy either, which seems to be tip-toeing toward a rebound.
To be sure, plenty of people are still out of work, a condition that has hampered commercial insurance sectors, including workers’ compensation, for a number of years. However, some analysts predict hiring will increase in 2011 as corporations start to spend some of the record amounts of cash they have stockpiled over the past several years. That cash would not only be used for direct hires but also on the goods and services of small- to medium-sized businesses, which traditionally are the nation’s job creators.
In fact, some commercial sectors already have begun to expand. Manufacturing output in the United States increased in December for the 17th straight month, according to a recent report released by the Institute for Supply Management. Construction spending also appears to be on the rise, according to the Commerce Department.
Analysts such as Mark Zandi, chief economist at Moody Analytics, have predicted growth in 2011, even if is slight. Zandi predicts a 3.8 percent growth in the U.S. economy in the next year and suggests that large corporate profits will lead to investments and hiring.
A report released by the job search website Careerbuilder.com echoes Zandi’s predictions about hiring. Nearly a quarter of employers (24 percent) surveyed by the site said they plan to hire full-time permanent employees in 2011. That’s up from the 20 percent who said the same thing in 2010 and 14 percent in 2009.
The property/casualty insurance industry will see growth for the first time since 2006, predicts Robert Hartwig, president of the Insurance Information Institute. Hartwig said he’s seen increased demand for commercial insurance and thinks that demand will accelerate throughout the year. Hartwig told an audience of insurance professionals at a recent conference in California that workers’ compensation, commercial auto, marine and many liability coverages will be among the growth areas in the P/C sector.
Not everything is coming up roses, of course. Personal bankruptcies are up and there are plenty of unsold houses on the market. But there are signs of an increasingly positive 2011.
It will be fascinating to watch as the year unfolds. Hopefully good news will outweigh the bad.