The insurance industry in Michigan grew by double digits over a 13-year period and remains poised to grow even more with the cluster of talent based in the state.
Those were among the conclusions in a new report that for the first time offers a broad look at the state’s insurance industry, which in 2018 accounted for 4.6 percent of Michigan’s gross domestic output, directly employed more than 80,000 people, and supported another 58,000 jobs indirectly through the purchase of goods and services.
The industry paid $9.1 billion in wages last year, $1.2 billion in state and local taxes, and generated an overall direct and indirect economic contribution of $38.27 billion.
The insurance industry employment in Michigan grew 16.2 percent from 2005 to 2018 as “a lot of other industries were in decline or stagnant,” and as the state’s overall economy grew about 0.4 percent during the same period, said Melissa Gibson, a senior consultant at Lansing-based Public Sector Consultants Inc. and an author of the report.
“It’s an improving and increasingly important sector in Michigan’s economy,” Gibson said.
Public Sector Consultants conducted the study on behalf of several insurance and business organizations, led by the Life Insurance Association of Michigan.
In commissioning the study, the Life Insurance Association wanted to gauge how the insurance industry fit into Michigan’s broader economy, said Executive Director Traci Riehl. The findings show insurance ranks as the state’s 11th largest industry.
“We wanted to know as an industry where we stood,” Riehl said. “We feel that we have a very significant impact on the economy, but we’re never touted … and we kind of wanted to see where we fell.”
The report offers a view of the insurance industry’s size and scope in Michigan across all segments: property and casualty, health, life, and agencies and brokerages.
The findings can go to create greater public awareness among people “who don’t necessarily see insurance as such a large presence in Michigan’s economy” or the diversity of jobs the industry supports, Gibson said.
Nearly one-third of the direct jobs in the state’s insurance industry are in office and administrative support positions and 28.5 percent are in business and financial operations. Another 13.3 percent are for management jobs and 12.3 percent are information technology positions such as programmers and database administrators.
“Everybody thinks of the insurance industry as being accountants and actuaries and insurance agents, and it is a lot more,” Gibson said. “There are a lot of other jobs and a lot of other opportunities for people to engage in the insurance industry for employment.”
While insurance often isn’t viewed as an appealing career option, “there are some fantastic jobs in that arena,” Riehl said.
I.T. positions in particular are in high demand within the insurance industry right now, Riehl said. She notes that carriers such as Farm Bureau Insurance, Auto-Owners Insurance Co. and Jackson National Life Insurance Co. have all built new or remodeled corporate facilities in Lansing, partly to make the workplace more appealing and attract I.T. professionals that are increasingly important to the industry.
Jobs in the insurance industry pay well, too, averaging an annual salary of $68,400, which compares to a state average of $61,172 across all industries. Positions in life insurance paid the highest wage in the industry at an average of $89,700 a year.
The report also arms economic developers across the state with data showing the depth of the insurance industry and the talent cluster in Michigan that could potentially help to lure future investments by other insurance companies, Gibson said.
“We already have a large base and a large sector and we do have a lot of talent in the area that can be utilized,” she said. “This is one piece to help support and document what we already have here, and where we’re going and where we’ve been in the past to try and help make the case for business attraction.”
Across the industry in Michigan, insurance agencies and brokerages were the largest employers as of 2018, directly employing 29,503 people.
Property and casualty carriers were the second-largest segment with 16,552 direct employees. That’s just ahead of health insurers at 16,483 direct jobs. Life insurers directly employed 5,356 people.
Riehl hopes that the findings can lead to more insurance firms choosing to locate operations in Michigan, including corporate or regional headquarters as well as local branches. She’ll use the data at industry trade shows and conferences to promote Michigan to other insurance companies with the message: “Look, Michigan is a great place to do business because we have the talent there.”
“The more companies we have here, the stronger our workforce is,” Riehl said. “If we have more companies here, we’ll attract more talent.”