Insurance Investments

Insurance Investments in California

Insurance Commissioner John Garamendi announced the preliminary findings of a California Department of Insurance survey September 29, 2005 showing that insurers have invested more than $7 billion in California communities since 1996.

The survey of more than 1,000 insurers doing business in the state identified more than 2,500 individual investments that qualify under the guidelines of the California Organized Investment Network (COIN).  It is very positive that the Commissioner instituted this survey.

Californians paid more than $115 billion last year in premiums and roughly $1 trillion over the past decade.  Thus, the $7 billion represents roughly 0.7 percent of revenue over the last 10 years.  So, while the $7 billion is more than previously known, it is a disappointingly small amount of investments compared to revenue.

The Data Call was sent to 1,355 companies admitted to do business in California and 932 companies responded.  These companies comprise 69% of all companies and wrote 91% of the total 2004 California direct premiums.  But 423 companies failed to provide any response to the Data Call.  These companies comprise 31% of all companies and wrote 9% of the total 2004 California premiums.

More than 5,000 investments were reported in response to the Data Call.  COIN reviewed all of these investments and determined that about 2,500 qualify as meeting the definitions in the Data Call for California community development investments.  And 86% of all companies who admitted to doing business in California – 1,159 companies – did not report qualifying investments.  These companies wrote 48% of the 2004 California direct premiums.