More than the Denver Broncos and a Rocky Mountain High

The United States Census Bureau’s Census 2000 estimated the population of the State of Colorado at 4,301,261. Approximately 87 percent of the adult residents had graduated from high school and about 33 percent had earned a bachelor’s degree or higher. The capital city, Denver, has a population of 554,636.

From an employment perspective, the primary industries in Colorado are:

From a P/C insurance perspective, Colorado accounted for $6,900,716,000 of direct written premium. Countrywide as of Sept. 30, 2003 the aggregate is $313,781,216,000 of P/C insurance written. Colorado calendar year 2002 loss ratio of 65.2
percent was slightly above the countrywide year to date Sept. 30, 2003 loss ratio of 62.3 percent. It was interesting to note that Colorado’s medical malpractice loss ratio for calendar year 2002 was 63.7 percent compared to the countrywide
average at Sept. 30, 2003 of 73.6 percent.

One surprise was that Colorado’s farmowners insurance premium for calendar year 2002 was $45,423,000. However, in a state with 44,658 farming, fishing and forestry employees, that seems about right.

The Colorado economy is slowly growing with well-paying jobs. The employed civilian population comprises over one-half of Colorado’s population.

It is distributed as follows:

Given the anticipated growth in the number of jobs located in Colorado and the diversification of the Colorado economy, I would expect the growth rate of Colorado’s P/C insurance marketplace, as measured by direct premium written, to approximate the growth rate experienced on a countrywide basis.

This article was written by Joseph L. Petrelli, pesident and founder of Demotech Inc. Demotech Inc. is a Columbus, Ohio-based financial analysis and actuarial services firm. Petrelli is a member of the Casualty Actuarial Society, American Academy of Actuaries and the
Conference of Actuaries in Public Practice. Additional information can be found at www.demotech.com.