Will Michigan be the country’s new insurance hub?

A statewide analysis of the insurance industry’s $37.1BN economic impact on the state may lure more companies to Michigan, many say

Insurance News

By Louie Bacani

The Anderson Economic Group recently conducted an analysis of Michigan’s insurance industry. While the analysis found much potential in the region’s insurance industry as a hub, the data also suggests that it could use new blood to revitalize itself.

According to the agency’s analysis, Michigan’s $37.1 billion economic impact could be a strong selling point to entice more insurance companies to operate in the region. The industry employs 41,000 people and supports an overall total of 114,000 jobs, directly and indirectly.

The analysis additionally noted that insurance carriers in Michigan invested a total of $1.5 billion in assets in the state, through real estate, shares in state-based corporations, and municipal bonds. Not all carriers answered the survey so the estimate was considered “very conservative.”

Department of Insurance and Financial Services Director Patrick McPharlin credited the insurance industry for mitigating the impact of the Great Recession on the Lansing area. Insurance carriers based in the region added jobs, sustained profitability, and even got the local construction trade to develop new facilities, McPharlin said.

Despite being a strong contributor in the state’s economy, Michigan’s insurance industry has an aging workforce that desperately needs fresh faces.
“We know we need young people and new blood [coming] into our industry, and that training does not happen overnight,” said Michigan Association of Insurance Agents CEO Bev Barney during a legislative hearing.

A separate report from the Insurance Institute of Michigan projected that roughly 40% of the state’s current insurance professionals will reach retirement age within the next decade.

The Anderson Economic Group’s analysis was commissioned by the Michigan Chamber of Commerce, Lansing Regional Chamber of Commerce, Lansing Economic Area Partnership, the Insurance Institute of Michigan, the Michigan Insurance Coalition, the Michigan Association of Insurance Agents, and the Michigan Economic Development Corp.
 

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