The Silver State – Sagebrush, Hoover Dam and Vegas
The United States Census Bureau’s Census 2000 estimated the population of the State of Nevada at 1,998,257. Approximately 81 percent of the adult residents had graduated from high school and about 18 percent had earned a bachelor’s degree or higher. The capital, Carson City, has a population of 52,457.
From an employment perspective, the primary industries in Nevada are:
From a P/C insurance perspective, during calendar year 2003, Nevada accounted for $3,468,726,000 of direct written premium. Countrywide the aggregate was $450,260,601,000 of P/C insurance written. The Nevada calendar year 2003 loss and defense and cost containment ratio (DCC) of 69.9 percent was slightly above the comparable countrywide ratio of 67.6 percent. It was interesting to note that Nevada’s medical malpractice loss and DCC ratio for calendar year 2003 was 87.3 percent, down from 174.9 percent at the end of calendar year 2002.
What surprised me was that Nevada farmowners insurance premium for calendar year 2003 was $5,425,000. I expected it to be all but non-existent. In a state with 2,499 farming, fishing and forestry employees, perhaps that is about right.
The Nevada economy is dependent on tourism. The employed civilian population comprises less than half of Nevada’s population. It is distributed as follows:
Given the anticipated growth in the number of jobs located in Nevada, enhanced airline security and the level of diversification of the Nevada economy, I would expect the growth rate of Nevada’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. 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.