Buckeye State Bucks National Trend on Medical Malpractice
The U.S. Census Bureau’s 2000 census estimated Iowa’s population at nearly 3 million. About 86 percent of the adult residents had graduated from high school and about 21 percent had earned a bachelor’s degree or higher. The capital city, Des Moines, has a population of 198,682.
From an employment perspective, the primary industries in Iowa are:
From a property/casualty insurance perspective, Iowa accounted for $3.8 billion of direct written premium. Countrywide as of Sept. 30, 2003, the aggregate was $313.8 billion of P/C insurance written. The Iowa calendar-year 2002 loss ratio of 58.8 percent was below the countrywide nine-month loss ratio of 62.3 percent. It was interesting to note that Iowa’s medical malpractice loss ratio for calendar-year 2002 was 66.5 percent compared to the countrywide nine-month average of 73.6 percent. Medical malpractice insurance premium comprised 1.9 percent of the P/C premium written in Iowa, as opposed to 2.5 percent of the premium written countrywide.
What surprised me the most was that Iowa farmowners’ insurance premium for calendar-year 2002 was $78.4 million. I expected it to be more. However, in a state with 15,877 farming, fishing and forestry employees, perhaps that is about right.
The Iowa population is relatively well-educated. The employed civilian population comprises approximately 51 percent of Iowa’s population. It is distributed as follows:
However, given the anticipated growth in the number of jobs located in Iowa and the need for additional diversification of the Iowa economy, I would expect the growth rate of Iowa’s P/C insurance marketplace, as measured by direct premium written, to approximate the growth rate experienced on a countrywide basis.
Joseph L. Petrelli is president and founder of Columbus, Ohio-based Demotech Inc., 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.