Contribution to the Economy

Property/casualty and life/health insurance contribute to our economy far beyond their core function of helping to manage risk. Insurers contribute about $300 billion to the nation’s gross domestic product annually. The taxes they pay include special levies on insurance premiums, which amounted to $15.3 billion in 2007, or 2.0 percent of all taxes collected by the states (see page 44). Insurance companies invest the premiums they collect in state and local municipal bonds, helping to fund the building of roads, schools and other public projects. They provide businesses with capital for research, expansions and other ventures through their holdings in stocks and bonds, a figure which totaled $3.4 trillion in 2007. The industry is also a major contributor to charitable causes, with donations to U.S. beneficiaries totaling $147.1 million in 2006, placing it among the top 15 contributors, according to a survey of industries by the Conference Board. The sector is also a very large employer, providing some 2.3 million jobs, or 2.0 percent of U.S. employment in 2008.