Preface
What Insurance Means To Ohioans
 

When people think about insurance, they probably think about the last insurance premium they paid, the auto accident they had last year or the trip last month to the emergency room. This is what's expected. In 1997, 6.5% of American household expenditures were allotted to insurance needs (see chart below).
What insurance is

A universal complaint heard by auto insurance companies is, "My insurance rates have increased even though I haven't had an accident!" Why does this occur? Because individuals don't have a clear understanding of how insurance works. A common misconception about insurance is that it works like a savings account. An individual continues to pay premiums year after year, thinking that premium payments are placed in an "account" to pay for future incurred losses. This is not the way insurance works.

In simplest terms, insurance is a concept where "many people share the losses of the comparatively few." This concept does not necessarily provide comfort until you become "one of the few." The purpose of insurance is to help pay for losses that ordinarily you wouldn't be able to afford on your own. Without insurance, few people could afford the risk of owning a home or car. Lenders could not afford the risk of making loans for a new business venture or factory construction. And medical assistance or surgery would not be an option for many without the benefits insurance provides.

What insurance means to Ohio's economy
Ohio is a leading insurance state with 297 insurance companies domiciled in the state. In fact, Ohio ranks 10th in the US based on the number of property/casualty insurance companies domiciled within the state with 125. As a part of the financial services sector, Ohio's insurance industry provides stable employment to more than 90,958, not including the thousands of self-employed agents. For more employment information, see "Ohio and US Insurance Employment Statistics," click here.
Household Spending in 1997
Note: Percentages do not add up to 100 due to rounding.
Source: Insurance Information Institute from US Bureau of Labor Statistics, Consumer Expenditure Survey
It's a plastic world...Half of all adults carry 1-3 credit cards, one-third said they carry 4-6, 7% carry 7-9, and 13% of adults carry 10 or more credit cards. The more you make, the more credit cards you typically carry. 26% of adults with household incomes over $100,000 carry 10 or more cards.
(Standard Register, reprinted from USA Today, 6/30/99)
If insurance ceased for a year

Insurance is just one of the factors that enables Ohioans to make long-term commitments and secure a better future. In 1998 insurance played a role in:

  • 20,251 new businesses that were formed, creating new job markets
  • $7.7 billion in wages earned by Ohio's 229,397 construction industry employees
  • The sale of 398,502 cars and 329,392 trucks
  • Protecting the majority of Ohio's 7.8 million licensed drivers by providing auto insurance through a strong, competitive market
  • $3.88 billion paid to Buckeye residents employed by the state's insurance industry
  • Providing protection to Ohio's 4,630 schools, along with enabling the construction and renovation of new and existing school buildings and
  • Supporting a $114.8 billion Ohio retail sales industry.

Ohioans purchase insurance to protect their assets and as a means of financial security. The insurance industry covered personal losses well into the billions of dollars in 1998 including:

  • Nearly $7.9 billion in property, automobile, medical and other property/casualty insurance losses. These losses include $3.1 billion for personal and commercial automobile accident losses, $622 million in direct losses paid for homeowners insurance policyholder losses and $2.6 million in losses related to accident and health and
  • $4.7 billion distributed to the beneficiaries of accident and health insurance policies in private companies.
Insurance industry regulator

The Ohio Department of Insurance is the largest consumer protection agency in the state and sole regulator of Ohio's insurance industry. The department ensures the financial stability of insurers through ongoing reviews, audits and policy-making.

Additionally, the department regulates insurance company rate-setting and compliance standards. The Ohio Department of Insurance preserves Ohio's healthy insurance climate as well as protects the interests of millions of policyholders.

Insurance company stability
Property/casualty insurers guarantee the solvency of Ohio companies through the Ohio Insurance Guaranty Association, which is supported by the industry. When an insurance company is declared insolvent all companies operating in the state are assessed on the basis of their share of the statewide insurance market. These funds are used to pay the covered claims and unearned premiums of the insolvent company. For more information on the Ohio Insurance Guaranty Association, click here.

An insurance wish list...
One-fifth of adults say they have been in a situation that caused them to wish they had more insurance. Noted for inadequate coverage (some indicated more than one insurance product line) by those surveyed were:

  • Life 32%
  • Disability 26%
  • Long-term care 23%
  • Auto 21%
  • Homeowners/renters 15%
  • Property/casualty 14%

(Yankelovich Partners for Lutheran Brotherhood, reprinted from USA Today, 7/14/99)