Pennsylvania: Home to Gene Kelly, Liberty Bell and Hershey Chocolate

The states boasts a good homeowners loss ratio and a diversified economy

The United States Census Bureau’s Census 2000 estimated the population of the Pennsylvania at 12,281,054. Approximately 82 percent of the adult residents had graduated from high school and about 22 percent had earned a bachelor’s degree or higher. The capital, Harrisburg, has a population of 48,950.

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

From a P/C insurance perspective, Pennsylvania accounted for $16,813,302,000 of direct written premium. Countrywide as of Sept. 30, 2003, the aggregate was $313,781,216,000 of P/C insurance written. The Pennsylvania calendar year 2002 loss ratio of 84.3 percent was above the countrywide year to date Sept. 30, 2003, loss ratio of 62.3 percent. It was interesting to note that Pennsylvania’s homeowners loss ratio for calendar year 2002 was 57.1 percent compared to the countrywide average at Sept. 30, 2003, of 61.8 percent. Homeowners insurance premium comprised 10.1 percent of the P/C premium written in Pennsylvania. Homeowners premium comprised 10.7 percent of the premium written countrywide.

What surprised me the most was that Pennsylvania farmowners insurance premium for calendar year 2002 was $65,819,000. I expected it to be more. However, in a state with 26,722 farming, fishing and forestry employees, perhaps that is about right.
The Pennsylvania economy is stagnant. The employed civilian population comprises less than half of Pennsylvania’s population. It is distributed as follows:

Given anticipated job growth and the diversification of the state’s economy, I expect the growth of Pennsylvania’s P/C marketplace will about equal P/C growth countrywide.

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.