Industry Impact to the Economy in North Carolina

The insurance industry has a significant impact on North Carolina’s economy that extends well beyond its responsibilities to collect premiums and settle claims.  In N.C. alone, the industry employs more than 100,000 people, pays about $675 million in state premium taxes, and contributes about $12 billion to North Carolina’s gross state product.  Perhaps of greater importance, property and casualty insurance companies paid close to $10 billion in claims to help individuals and businesses recover from losses in 2020.

North Carolina is susceptible to potentially devastating effects from natural disasters such as hurricanes, tornadoes, wildfires, flooding, and winter storms.  Non-catastrophic losses like house fires, and lightning strikes can also cause significant damage to property.

According to the Insurance Information Institute, wind and hail are consistently the most frequent cause of loss for property damage, and North Carolina is no exception.  Five of the fifteen most costly hurricanes to hit the United States caused damage in North Carolina (Hugo, Charley, Ivan, Frances, and Sandy).  North Carolina also surprisingly ranked sixth in the nation for wildfires (2,364 fires burned 12,875 acres in 2020), and is in the top fifteen states for tornado frequency over the last 30 years.

By paying claims and assisting in the recovery effort, insurers help provide individuals and businesses with economic security, and help make our communities more resilient.  However, Russ Dubisky, a media relations representative for the Insurance Federation of North Carolina (IFNC), says the economic impact doesn’t stop there, “Insurance products provide protection against significant financial loss, but the industry clearly makes other important contributions to the economy that are, perhaps, less quantifiable.  Insurance provides necessary protection for our most important assets, and protects lenders’ collateral to help stimulate our credit-based economy.”

Lenders often require borrowers to purchase insurance for homes that have mortgages and vehicles that have liens.  In an environment where most American families depend on loans to purchase cars, homes, and/or to start a business, insurance is a critical component in making sure these borrowing opportunities are available.

Using figures compiled by the Insurance Information Institute, the insurance industry makes a significant imprint in the following areas:

  • Employment: The insurance industry provided 104,181 jobs in North Carolina in 2019, according to the U.S. Department of Commerce.  These jobs accounted for about $7.4 billion in compensation that same year.

  • Gross state product: The industry’s contribution to the gross state product (GSP) in 2019 was about $12 billion, accounting for almost 2% of the total.

  • Taxes: North Carolina collected a total of $675 million in premium taxes from insurance companies in 2020. 

  • Claims payments: In 2020, property/casualty losses totaled $7.5 billion in North Carolina.  Life insurance and claims and benefits payments in the state were $15.5 billion for the same year.