The Bluegrass State – Home of Louisville Slugger, Abe Lincoln Birthplace

The United States Census Bureau’s 2000 census estimated the population of the State of Kentucky at 4 million. Approximately 74 percent of the adult residents had graduated from high school and about 17 percent had earned a bachelor’s degree or higher. The capital, Frankfort, has a population of 27,741.

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

From a property/casualty insurance perspective, Kentucky accounted for just over $5 million of direct written premium. Countrywide as of Sept. 30, 2003 the aggregate is $313,781,216,000 of P/C insurance written. Kentucky calendar year 2002 loss ratio of 85.8 percent was above the countrywide year to date Sept. 30, 2003 loss ratio of 62.3 percent. It was interesting to note that Kentucky’s homeowners’ loss ratio for calendar year 2002 was 125.9 percent compared to the countrywide average at Sept. 30, 2003 of 61.8 percent. Homeowners’ insurance premium comprised 9.4 percent of the P/C premium written in Kentucky. Homeowners’ premium comprised 10.7 percent of the premium written countrywide.

Farmowners insurance premium for calendar year 2002 was $82,177,000. Statewide there were 16,270 farming, fishing and forestry employees.

The Kentucky economy is being revitalized. The employed civilian population comprises about 45 percent of Kentucky’s population. It is distributed as follows (see chart above). I would expect the growth rate of Kentucky’s P/C marketplace, as measured by direct premium written, to exceed the growth rate experienced on a countrywide basis.

Joseph L. Petrelli is president and founder of Demotech, Inc. Demotech, Inc. is 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.