More than Evergreens, Apples, Mt. St. Helens and Starbucks

The United States Census Bureau’s Census 2000 estimated the population of the State of Washington at 5,894,121. Approximately 87 percent of the adult residents had graduated from high school and about 28 percent had earned a bachelor’s degree or higher. The capital, Olympia, has a population of 42,514.

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

From a P/C insurance perspective, Washington accounted for $7,253,470,000 of direct written premium. Countrywide as of Sept. 30, 2003 the aggregate is $313,781,216,000 of P/C insurance written. Washington calendar year 2002 loss ratio of 68.2 percent was slightly above the countrywide year to date Sept. 30, 2003 loss ratio of 62.3 percent. It was interesting to note that Washington loss ratios for calendar year 2002 approximated the countrywide loss ratios at Sept. 30, 2003 for most lines. The noticeable exception was medical malpractice insurance. Washington’s loss ratio for medical malpractice was nearly double the countywide average.

However, what surprised me the most was that Washington farmowners insurance premium for calendar year 2002 was $42,297,000. I expected it to be more. However, in a state with 43,495 farming, fishing and forestry employees, perhaps that is about right.

The Washington economy is growing. The employed civilian population comprises in excess of 47 percent of Washington’s population. It is distributed as follows:

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

This article was written by Joseph L. Petrelli, 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.