Coloradans Spent $26 Billion in Insurance Premiums in 2007

August 29, 2008

Where do Coloradans spend their insurance dollars? During 2007, Colorado citizens paid over 26 billion dollars in premium to approximately 1,306 companies, with 27 companies accounting for more than 50 percent of that total, according to the Colorado
Insurance Industry Statistical Report (for 2007) released by the Colorado Division of Insurance.

The report reflects some interesting statistics: Although carrying automobile insurance is mandatory, and purchasing health insurance is not, Coloradans spent more in 2007 on accident and health
insurance premiums, which represent 33 percent of the total insurance premiums paid in Colorado. Behind accident and health totals, the second largest premium volume was for annuities, with 16
percent of the total premium. Automobile insurance tied for third place, along with deposit-type funds (such as guaranteed investment contracts), with each accounting for 10 percent of the annual premiums. Life insurance accounted for 7 percent of Colorado’s total premiums.

“The statistical report can be very helpful because it illustrates the financial status of companies engaged in the business of insurance in Colorado and reflects which lines of business account for the largest payments of premium by Colorado consumers,” said Marcy Morrison, Commissioner of Insurance. “It shows the value that consumers place on insurance, and provides a snapshot of the general financial health of the insurance industry by showing loss ratios as well as premiums earned.”

A loss ratio is the ratio between the premiums paid to an insurance company and the claims settled by the company and is usually expressed as a percentage of losses incurred to premiums earned. A
higher loss ratio means that more of the premium dollar went toward claims and benefits, and less to overhead and profit.

The primary purpose of the Annual Statistical Report is to document the financial status of companies engaged in the business of insurance in Colorado. It includes information related to commercial
insurers, health maintenance organizations, non-profit organizations, captives, self-insurance pools and represents figures as of Dec. 31, 2007, the last complete year for which data is available.

To view the 2007 Colorado Insurance Industry Statistical Report, visit:
http://www.dora.state.co.us/insurance/pb/supporting%20documents/mktrFinal2007StatReport082208.pdf.

Source: DOI

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