West Virginia Proves More than Forests and State Sales Tax

The U.S. Census Bureau’s 2000 census estimated the population of the State of West Virginia at 1,808,344. Approximately 72 percent of the adult residents had graduated from high school and about 15 percent had earned a bachelor’s degree or higher. The capital, Charleston, has a population of 53,421.

From an employment perspective, the primary industries in West Virginia are:

From a property/casualty perspective, West Virginia accounted for $1,957,964,000 of direct written premium. Countrywide as of Sept. 30, 2003 the aggregate is $313,781,216,000 of P/C written. West Virginia calendar year 2002 loss ratio of 80.3 percent was above the countrywide year to date Sept. 30, 2003 loss ratio of 62.3 percent. It was interesting to note that West Virginia’s homeowners’ loss ratio for calendar year 2002 was 104.6 percent compared to the countrywide average at Sept. 30, 2003 of 61.8 percent. Homeowners’ insurance premium comprised 10.6 percent of the P/C premium written in West Virginia. Homeowners’ premium comprised 10.7 percent of the premium countrywide.

What surprised me the most was that West Virginia farmowners insurance premium for calendar year 2002 was $6,920,000. I expected it to be more. However, in a state with 5,362 farming, fishing and forestry employees, perhaps that is about right. The West Virginia economy is stagnant. The employed civilian population comprises about 40 percent of West Virginia’s population. It was distributed as follows:

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

Joseph L. Petrelli is president and founder of Demotech Inc. (www.demotech.com), a Columbus, Ohio- based financial analysis and actuarial services firm. Additional information can be found at www.demotech.com.

Topics Virginia Property Casualty West Virginia