New Jersey: The Garden State-Home of Frank Sinatra, First Baseball Game

The 2000 U.S. Census estimated the population of New Jersey at 8,414,350. Approximately 82 percent of adult residents had graduated from high school and about 30 percent had earned a bachelor’s degree or higher. The capital, Trenton, has a population of 85,403.

From an employment perspective, the primary industries in New Jersey are:

From a property/casualty insurance perspective, New Jersey accounted for $14,655,846,000 of direct written premium. Countrywide as of Sept. 30, 2003, the aggregate is $313,781,216,000 of P/C insurance written. New Jersey calendar year 2002 loss ratio of 66.9 percent was somewhat above the countrywide year-to-date Sept. 30, 2003, loss ratio of 62.3 percent. New Jersey’s private passenger automobile liability loss ratio for calendar year 2002 was 78.7 percent compared to the countrywide average at Sept. 30, 2003, of 66.5 percent. However, defense and cost containment expenses raised the loss and loss adjustment expense ratio to 90.2 percent. Over the same period, the homeowners insurance loss ratio was 50.7 percent.

One surprise is that New Jersey had in excess of $11 million of earthquake insurance premium for calendar year 2002. The loss ratio was a modest 10.7 percent

The New Jersey economy is diversified. The employed civilian population comprises nearly one-half of New Jersey’s population. It is distributed as follows:

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

Joseph L. Petrelli is president and founder of Demotech Inc., 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.