florida insurance markets at the crossroads critical issues in property, auto & other key...
TRANSCRIPT
Florida Insurance Marketsat the Crossroads
Critical Issues in Property, Auto & Other Key Coverages in a Weak Economy
5th Annual Insurance Summit, Florida Chamber of CommerceOrlando, FL
November 17, 2011Download at www.iii.org/presentations
Robert P. Hartwig, Ph.D., CPCU, President & EconomistInsurance Information Institute 110 William Street New York, NY 10038
Tel: 212.346.5520 Cell: 917.453.1885 [email protected] www.iii.org
2
Florida’s Insurance Markets Are Among the Biggest and
Most Volatile in the US
A Strong Insurance Industry Is in the Best Interest of Policyholders and Insurers and Is Essential to
Healthy Economy
3
Top Ten States by P/C Premium Volume, 2010*
$16.4$13.7 $13.2 $12.9
$55.0
$36.7 $35.2 $34.9
$20.2 $19.2
$0
$10
$20
$30
$40
$50
$60
CA TX FL NY IL PA NJ MI GA OH
*Direct premiums written.Source: SNL Financial; Insurance Information Institute
$ Billions Florida is a very important state to p/c insurers, with $35.2 billion in premiums written in 2010—
3rd highest in the country and accounting for 7.5% of all premium written in the US
Florida P/C Premiums Written Fell by Approximately 17% Between 2007 and 2009 As the State’s Economy Crashed
4
All Lines DWP Growth: FL vs. U.S., 2001-2010
Source: SNL Financial.
12.0
% 14.3
%
9.8%
7.4%
2.2% 3.
4%
0.5%
-2.1
%
-3.3
%
0.0%
13.4
%
15.3
%
11.4
%
11.9
%
10.3
% 14.1
%
-1.1
%
-9.0
% -6.5
%
1.2%
-15%
-10%
-5%
0%
5%
10%
15%
20%
01 02 03 04 05 06 07 08 09 10
US DWP: All Lines FL DWP: All Lines
(Percent)
5
Direct Premiums Written: All P/C Lines Percent Change by State, 2005-2010
44
.8
25
.4
19
.8
17
.3
16
.6
14
.2
13
.9
12
.4
12
.3
11
.9
9.1
8.1
8.1
7.1
6.8
5.4
5.2
4.7
3.8
3.7
3.1
3.0
1.5
1.2
1.1
0
5
10
15
20
25
30
35
40
45
ND
SD LA
WY
OK
WV
KS IA TX
MT
NE
DE
MS
NM SC
DC
UT
AR
NC ID WA
AL
WI
AK
TN
Pe
ce
nt
ch
an
ge
(%
)
Sources: SNL Financial LC.; Insurance Information Institute.
Top 25 States
North Dakota is the growth juggernaut of the P/C
insurance industry—too bad nobody lives there…
6
0.7
0.6
0.1
-0.1
-0.3
-0.5
-0.8
-1.4
-1.6
-1.7
-2.5
-2.8
-2.9
-3.4
-3.6
-4.1
-4.5
-4.7
-4.8
-5.7
-5.8
-8
-8.2
-8.3
-13
.5
-14
.2
-15
.5
-20
-15
-10
-5
0
5M
D
MO
KY IN NY
GA
MN
VA
US
PA
OR FL IL CT
VT
OH RI
CO
NJ HI
ME
NH
MA
AZ
NV MI
CA
Pe
ce
nt
ch
an
ge
(%
)
Sources: SNL Financial LC; Insurance Information Institute.
Bottom 25 States
Florida’s weak economy contributed to a nearly 3% net contraction in the size of the state’s P/C insurance market
between 2005 and 2010
Direct Premiums Written: All P/C Lines Percent Change by State, 2005-2010
US Direct Premiums Written declined by 1.6% between 2005
and 2010
7
Direct Premiums Written: Worker’s CompPercent Change by State, 2005-2010*
34
.4
23
.1
14
.2
10
.2
9.0
4.6
1.4
-3.7
-7.3
-9.3
-10
.0
-10
.3
-10
.9
-10
.9
-13
.0
-14
.7
-15
.3
-15
.9
-16
.9
-17
.8
-19
.8
-21
.4
-21
.7
-35-30-25-20-15-10-505
10152025303540
OK
MT ID LA
SD IA KS
NY WI
PA
MS IL
NM NJ
NE
MD
NC AL
CT VA
SC
AR
MN
Pe
ce
nt
ch
an
ge
(%
)
*Excludes monopolistic fund states: ND, OH, WA, WY as well as WV, which transitioned to a competitive structure during this period.
Sources: SNL Financial LC.; Insurance Information Institute.
Top 25 States
Only 7 (small) states showed growth in workers
comp premium volume between 2005 and 2010
8
Direct Premiums Written: Worker’s CompPercent Change by State, 2005-2010*
-22
.6
-23
.7
-24
.2
-25
.0
-25
.2
-25
.2
-25
.3
-26
.8
-26
.9
-28
.1
-28
.3
-28
.7
-29
.0
-30
.1
-32
.5
-32
.6
-33
.8
-34
.7
-36
.1
-42
.7
-45
.4
-50
.7
-51
.2
-57
.7
-70
-60
-50
-40
-30
-20
-10
0
AZ
ME
GA
KY IN NH
OR
DC
MA
TN VT
US
TX
AK
MO MI
UT RI
CO
DE
NV HI
CA
FL
Pe
ce
nt
ch
an
ge
(%
)
Bottom 25 States
Nearly 60% of workers comp premiums in FL disappeared between 2005 and 2010, more
than in any other state
*Excludes monopolistic fund states: ND, OH, WA, WY as well as WV, which transitioned to a competitive structure during this period.
Sources: SNL Financial LC.; Insurance Information Institute.
US Workers Comp DPW plunged 28.7% from
between 2005 and 2010
9
RNW All Lines: FL vs. U.S., 2000-2009
Sources: NAIC.
6.5%
-0.5%3.3%
9.5% 10.0%
5.3%
14.4%12.5%
2.4%6.3%
8.6% 7.7% 8.1%
16.9%
-8.3%
19.0% 20.1%
12.5% 12.4%
-30.2%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
00 01 02 03 04 05 06 07 08 09
US All Lines FL All Lines
P/C Insurer profitability in FL is below that of the US
overall over the past decade
US: 7.0%
FL: 6.7%
(Percent)
10
RNW PP Auto: FL vs. U.S., 2000-2009
Sources: NAIC.
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
00 01 02 03 04 05 06 07 08 09
US PP Auto FL PP Auto
Average 2000-2009
US: 7.2%
FL: 2.9%
11
RNW Homeowners: FL vs. U.S.,2000-2009
Sources: NAIC.
-53.4%
-183.3%
-200%
-150%
-100%
-50%
0%
50%
100%
00 01 02 03 04 05 06 07 08 09
US HO FL HO
(Percent)
Average 2000-2009
US: 4.7%
FL: 0.5%
15
Florida No-Fault (PIP) Fraud Update
Fraud and Abuse Have Cost Floridians More Than
$1 Billion Since 2009
16
Average No-Fault Claim Severity, 2011:Q2*
$1
7,0
25
$8
,54
9
$8
,16
2
$5
,17
8
$5
,16
5
$4
,21
2
$2
,91
9
$2
,24
5
$1
,89
2
$3
6,7
86
$7
,23
0
$5
,53
6
$5
,26
9$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
MI NJ FL NY MN DC KY HI ND PA KS UT MA
Several States Including FL Have Severe and Growing Problems With Rampant Fraud and Abuse in their No-Fault Systems. Claim Severities Are Up Sharply.
*Average of the four quarters ending 2011:Q2.Source: ISO/PCI Fast Track data; Insurance Information Institute.
MI, NJ, NY and FL currently are the largest states that have the most severe
problems in their no-fault system
FL has the 3rd highest auto no-fault average claim cost (severity) in the US
and recently surpassed NY
18
Top Ten Most Expensive And Least Expensive States For Automobile Insurance, 2008 (1)
RankMost
expensive statesAverage
expenditure RankLeast
expensive statesAverage
expenditure1 D.C. $1,126 1 North Dakota $503
2 Louisiana 1,105 2 Iowa 519
3 New Jersey 1,081 3 South Dakota 520
4 Florida 1,055 4 Nebraska 547
5 New York 1,044 5 Idaho 562
6 Delaware 1,007 6 Kansas 576
7 Rhode Island 986 7 Wisconsin 581
8 Nevada 970 8 North Carolina 595
9 Connecticut 950 9 Maine 600
10 Maryland 922 10 Indiana 612
(1) Based on average automobile insurance expenditures.
Source: © 2010 National Association of Insurance Commissioners.
Florida Is Now Ranked as the 3rd Most Expensive State for Auto Insurance, Recently Overtaking NY, With an Average Expenditure of $1,055. FL Could Become the Most Expensive State in the US
if Nothing Is Done to Control No-Fault Fraud and Abuse
20
Florida No-Fault (PIP) Claim Severity Is Trending Sharply Upward*
$7,552 $7,536
$8,022
$7,689
$8,085
$8,796 $8,758$8,602
$5,812
$7,045$6,741
$7,159$7,427 $7,534
$5,000
$5,500
$6,000
$6,500
$7,000
$7,500
$8,000
$8,500
$9,000
08:Q1 08:Q2 08:Q3 08:Q4 09:Q1 09:Q2 09:Q3 09:Q4 10:Q1 10:Q2 10:Q3 10:Q4 11:Q1 11:Q2
*Claim frequency is defined as the number of claims per 100 earned car years.Source: ISO/PCI Fast Track data; Insurance Information Institute
2008:Q4 through 2011:Q2
The Average Cost of FL No-Fault Claims Is Rising Rapidly
No-Fault claim severity (average cost per claim) is up 48.0% between Q1 2008 and Q2 2011 to a near-record high $8,602 per claim. No-fault fraud and abuse is the main driver.
21
Florida No-Fault (PIP) Claim Frequency Is Trending Sharply Upward*
1.761.82
1.90
2.01 2.05
1.88 1.881.95
1.54
1.421.49
1.421.52
1.72
1.00
1.20
1.40
1.60
1.80
2.00
2.20
08:Q1 08:Q2 08:Q3 08:Q4 09:Q1 09:Q2 09:Q3 09:Q4 10:Q1 10:Q2 10:Q3 10:Q4 11:Q1 11:Q2
*Claim frequency is defined as the number of claims per 100 earned car years.Source: ISO/PCI Fast Track data; Insurance Information Institute
2008:Q4 through 2011:Q2
Both the Number and Average Cost of FL No-Fault Claims Are Up Sharply Since Mid-2008
No-Fault claim frequency surged by 37.3% between Q2 2008 and Q2 2011. No-fault fraud and abuse is the only explanation
24
Florida’s No-Fault Fraud Tax: Estimated Cost per Insured Vehicle, 2009-2011E
$26.21
$54.27$57.60
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2009 2010 2011E
*2011 estimate is based on data through Q2:2011. Source: Insurance Information Institute calculations and research.
Fraud Tax Per Vehicle
Unscrupulous Medical Providers and Attorneys Are Costing Honest Florida Drivers Hundreds of Millions of Dollars
In 2011, the estimated average Florida driver’s fraud tax is $57.60 per vehicle. This means that the fraud tax on a typical family with 2 cars is more than $115 this year last
year, more than doubling since 2009
+107.1% +6.1%
25
Florida’s No-Fault Fraud Tax: Estimated Aggregate Annual Cost, 2009-2011E ($ Millions)
$657.6$617.3
$297.0
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2009 2010E 2011F
Fra
ud
Ta
x (
$ M
illio
ns
)
*2011 estimate is based on data through Q2:2011.Source: Insurance Information Institute calculations and research from ISO/PCI and AIPSO data.
Unscrupulous Medical Providers and Attorneys Are Costing Honest Florida Drivers Hundreds of Millions of Dollars
The total fraud tax levied on Florida vehicle owners
is an estimated $658 million in 2011.
+107.6% +6.5%
26
Florida’s No-Fault Fraud Tax: Estimated Cumulative Cost, 2009-2011E ($ Millions)
$297.0
$914.3
$1,274.9
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2009 2010 2011E
Cu
mu
lati
ve
Fra
ud
Ta
x
Cumulative Fraud Tax
Unscrupulous Medical Providers and Attorneys Could Cost Honest Florida Drivers Billions of Dollars
The cumulative fraud tax levied on Florida vehicle owners is
estimated at $1.275 billion from 2009 through 2011
+107.6%
+6.5%
*2011 estimate is based on data through Q2:2011.Source: Insurance Information Institute calculations and research from ISO/PCI and AIPSO data.
27
Florida Property Insurance Market Update Update
More Than Six Years After the Last Major Storm Hit Florida,
Deep Problems Remain
29
Top 12 Most Costly Disastersin U.S. History: Most Impacted Florida
(Insured Losses, 2010 Dollars, $ Billions)
Sources: PCS; Insurance Information Institute inflation adjustments.
$11.5 $12.8$17.5
$22.6 $23.1
$45.8
$8.6$8.2$6.7$6.3$5.3$4.3
$0$5
$10$15$20$25
$30$35$40
$45$50
Jeanne(2004)
Frances(2004)
Rita (2005)
Hugo (1989)
Ivan (2004)
Charley(2004)
Wilma(2005)
Ike (2008)
Northridge(1994)
Andrew(1992)
9/11Attack(2001)
Katrina(2005)
8 of the 12 largest catastrophes in US history have had direct
impacts on Florida property insurance markets
= Impacted FL; = No FL impact
31
Top 15 Most Costly World Insurance Losses, 1970-2011*
(Insured Losses, 2010 Dollars, $ Billions)
*Through June 20, 2011. 2011 disaster figures are estimates; Figures include federally insured flood losses, where applicable.Sources: Swiss Re sigma 1/2011; Munich Re, AIR Worldwide, RMS, Eqecat; Insurance Information Institute.
$20.5 $20.8 $23.1 $24.9$30.0
$72.3
$14.9$14.0$11.3$10.0$9.3$9.0
$0
$10
$20
$30
$40
$50
$60
$70
$80
TyphoonMirielle(1991)
Charley(2004)
NewZealandQuake(2011)
Rita (2005)
Wilma(2005)
Ivan (2004)
Ike (2008)
Northridge(1994)
WTCTerrorAttack(2001)
Andrew(1992)
JapanQuake,
Tsunami(2011)*
Katrina(2005)
6 of the 12 largest catastrophes in global history
have had direct impacts on Florida property insurance
markets, despite recent record losses abroad
= Impacted FL; = No FL impact
Florida is clearly one of the riskiest place on earth for insurers to
operate, but the risk is largely manageable
through private insurance and
reinsurance markets
32
Hurricanes, Insolvencies and Insured Losses, 1984-2011Insured Loss ($ Bill, 2009 Dollars)
No. of Insolvent Insurers
Sources: Florida TaxWatch, Risk & Reform: A Florida TaxWatch Analysis of Florida’s Property Insurance System, November 2011, citing the Insurance Information Institute and the Florida Hurricane Fact File.
33
Top Ten Most Expensive And Least Expensive States For Homeowners Insurance, 2008 (1)
RankMost
expensive statesAverage
expenditure RankLeast
expensive statesAverage
expenditure1 Texas (3) $1,460 1 Idaho $387
2 Florida (4) 1,390 2 Utah 432
3 Louisiana 1,155 3 Oregon 439
4 Oklahoma 1,048 4 Washington 471
5 Massachusetts 1,026 5 Wisconsin 503
6 New York 983 6 Delaware 535
7 Connecticut 980 7 Ohio 565
8 Mississippi 980 8 Maine 572
9 D.C. 926 9 Pennsylvania 586
10 Kansas 916 10 Kentucky 601
(1) States with the same premium receive the same rank.(2) Based on the HO-3 homeowner package policy for owner-occupied dwellings, 1 to 4 family units. Provides “all risks” coverage (except those
specifically excluded in the policy) on buildings and broad named-peril coverage on personal property, and is the most common package written.(3) The Texas Department of Insurance developed home insurance policy forms that are similar but not identical to the standard forms.(4) Florida data excludes policies written by Citizen's Property Insurance Corporation, the state's insurer of last resort, and therefore are not directly
comparable to other states.
Note: Average premium=Premiums/exposure per house years. A house year is equal to 365 days of insured coverage for a single dwelling. The NAIC does not rank State Average Expenditures and does not endorse any conclusions drawn from this data.
Source: © 2010 National Association of Insurance Commissioners (NAIC). Reprinted with permission. Further reprint or distribution strictly prohibited without written permission of NAIC.
Florida ranked as the 2nd most expensive state for homeowners insurance in 2008, with an average expenditure of $1,390.
34
Federal Disasters Declarations by State, 1953 – Nov. 13, 2011: Highest 25 States
86
78
70
65 63
58
55 55 53 53 51 50 50 48 48 47 47 47 46 45 45 44 42 40 39
0
10
20
30
40
50
60
70
80
90
100
TX CA OK NY FL LA AL KY AR MO IL MS TN IA MN KS NE PA WV OH VA WV ND NC IN
Dis
aste
r Dec
lara
tions
Source: FEMA: http://www.fema.gov/news/disaster_totals_annual.fema; Insurance Information Institute.
Over the past nearly 60 years,
Texas has had the highest number of Federal Disaster
Declarations
FL has had 63 federal disaster declarations
since 1953, approximately 1 per
year, but has had none since 2009
35
Federal Disasters Declarations by State, 1953 – Nov. 13, 2011: Lowest 25 States*
39 39
36 35 35
32 32
27 27 26 26 25 25 24 23 23 22
20
17 16 16 15 14
11
9 9 9
0
10
20
30
40
50
ME SD GA AK WI VT NJ NH OR MA PR HI MI AZ ID NM MD MT NV CO CT SC DE DC RI UT WY
Dis
aste
r Dec
lara
tions
*Includes Puerto Rico and the District of Columbia.
Source: FEMA: http://www.fema.gov/news/disaster_totals_annual.fema; Insurance Information Institute.
Over the past nearly 60 years, Wyoming, Utah and Rhode Island had the fewest number of
Federal Disaster Declarations
36Source: MR NatCatSERVICE
Natural Loss Events,January – September 2011
World Map
Insured losses 1980 - 2011 (January – June only): US$ 389bn Insured losses 1980 - 2011 (January – June only): US$ 389bn
37Source: MR NatCatSERVICE © 2011 Munich Re
58%58%
2%
21%21%
<1%
12%12%
6%
Worldwide Natural Disasters, 1980-2011% Distribution of Insured Losses Per Continent (January – June only)
Source: Guy Carpenter, GC Capital Ideas.com, September 26, 2011.
Global Property Catastrophe Rate on Line Index, 1990-2011 YTD (6/1/11)
A modest increase in global property catastrophe reinsurance pricing was
evident in June 1 renewals in the wake of record global catastrophe
losses. Larger increase could occur for the Jan.1, 2012 renewals
Global Reinsurance Capital, 2007-2011:H1
Reinsurer Capital%
Change
Source: Aon Reinsurance Market Outlook, September 2011 from Individual Company and AonBenfield Analytics; Insurance Information Institute.
$411
$342
$402
$445$470
17%
-17%
-5%
18%
$300
$320
$340
$360
$380
$400
$420
$440
$460
$480
$500
2007 2008 2009 2010 2011:H1-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Reinsurer Capital Change
High Global Catastrophe Losses Have Had a Modest Adverse Impact on Global Reinsurance Market Capacity
Global reinsurance market capacity is down in mid-2011 due to large
catastrophe losses
40
U.S. Policyholder Surplus, 2006:Q4–2011:Q2
Sources: ISO, A.M .Best.
($ Billions)
$487.1$496.6
$512.8$521.8
$478.5
$455.6
$437.1
$463.0
$490.8
$511.5
$540.7$530.5
$544.8$556.9
$559.1
$505.0$515.6$517.9
$420
$440
$460
$480
$500
$520
$540
$560
$580
06:Q4 07:Q1 07:Q2 07:Q3 07:Q4 08:Q1 08:Q2 08:Q3 08:Q4 09:Q1 09:Q2 09:Q3 09:Q4 10:Q1 10:Q2 10:Q3 10:Q4 11:Q2
2007:Q3Previous Surplus Peak
Quarterly Surplus Changes Since 2007:Q3 Peak
09:Q1: -$84.7B (-16.2%) 09:Q2: -$58.8B (-11.2%)09:Q3: -$31.0B (-5.9%)09:Q4: -$10.3B (-2.0%)10:Q1: +$18.9B (+3.6%)
10:Q2: +$8.7B (+1.7%)10:Q3: +$23.0B (+4.4%)10:Q4: +$35.1B (+6.7%)11:Q1: +$42.9B (+8.2%)11:Q2: +37.3B (+7.1%)
Surplus as of 6/30/11 fell by 1% below its all time record high of $564.7B set
as of 3/31/11. Further declines are likely
*Includes $22.5B of paid-in capital from a holding company parent for one insurer’s investment in a non-insurance business in early 2010.
The Industry now has $1 of surplus for every $0.78 of
NPW—the strongest claims-paying status in its history.
41
Florida’s Economy: Weakness Hurts Insurer
Growth Prospects
Insurance Will Help Facilitate Accommodate Future Growth
in the Florida Economy
42
Real GDP Growth: Florida vs. US, 2007-2012F
1.1%
-3.4%
1.4%2.0% 2.2%1.9%
-0.3%
-3.5%
3.0%
1.8% 2.1%
-3.7%-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
2007 2008 2009 2010 2011F 2012F
US FL
Annual Change, 2007 through 2012F
Faster Growth Will Benefit All Floridians as Well as Their Insurers
FL economy sank faster than the US during the crisis;
Recovery is similar to US.
Source: US Depart. of Labor, US Dept. of Commerce (historical); Wells Fargo Securities (FL forecasts) as of September 2011; Blue Chip Economic Indicators (US Forecast, Nov. 2011); Insurance Information Institute.
43
European Exports as a Percent of State GDPInsured Loss ($ Bill, 2009 Dollars)
No. of Insolvent Insurers
Source: US Dept. of Commerce ; Wells Fargo Securities estimates, November 2011; Insurance Information Institute.
FL has a moderate
exposure to weakness in
Europe
Unemployment Surged, Incomes Plunged in FL As the Real Estate Bubble CollapsedUnemployment Rate (%)
% Change in Nominal Personal Income
Source: US Department of Labor (historical); Wells Fargo Securities (FL forecasts) as of September 2011; Insurance Information Institute.
4.0
10.211.0
6.2
11.510.7
2.2%2.5%4.5% 4.2%
4.3%-2.3%
0
2
4
6
8
10
12
14
2007 2008 2009 2010 2011F 2012F-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
FL Unemployment Rate Change in Nominal Personal Income
High Unemployment and Lower Income Are a Drag on Florida’s Economy
FL unemployment remains above the US average but income growth in recovering
Unemployment in FL in 2012 is estimated at
10.7% vs. 9.0% for the US
45
Unemployment Rates by State, September 2011:Highest 25 States*
13.4
11.9
11.1
11.0
10.6
10.6
10.5
10.5
10.3
10.0
9.8
9.8
9.7
9.6
9.2
9.1
9.1
9.1
9.1
9.0
8.9
8.9
8.7
8.5
8.3
0
2
4
6
8
10
12
14
NV CA MI SC FL MS NC RI GA IL AL TN KY OR NJ AZ OH WA US ID CT IN MO TX AR
Une
mpl
oym
ent R
ate
(%)
*Provisional figures for September 2011, seasonally adjusted.
Sources: US Bureau of Labor Statistics; Insurance Information Institute.
Florida has the 5th highest unemployment rate among
the 50 states
46
8.3
8.3
8.2
8.1
8.0
7.8
7.7
7.6
7.5
7.4
7.4
7.3
6.9
6.9
6.7
6.6
6.5
6.4
6.0
5.9
5.8
5.8
5.4
4.6
4.2
3.5
0
2
4
6
8
10
CO PA WV DE NY WI MT AK ME MD UT MA LA MN KS NM VA HI IA OK VT WY NH SD NE ND
Une
mpl
oym
ent R
ate
(%)
Unemployment Rates By State, September 2011: Lowest 25 States*
*Provisional figures for September 2011, seasonally adjusted.Sources: US Bureau of Labor Statistics; Insurance Information Institute.
Cold States = Low Unemployment
47
Weak Population Growth, Slow Household Formation Is Tempering FL Growth
108.1
68.2
28.2 38.750.0
264.3
135.6
99.7117.2 110.0
128.8
26.0
0
50
100
150
200
250
300
2007 2008 2009 2010 2011F 2012F
Change in FL PopulationChange in No. Households
Thousands
FL’s Construction Sector, One of Most Critical of FL’s Growth Engines, Remains in a Deep Recession
Household formation slowed faster than population
growth, suggesting people are consolidating
households as the state’s foreclosure crisis continues
Source: Dept. of Commerce (historical); Wells Fargo Securities (FL forecasts) as of September 2011; Insurance Information Institute.
48
Housing Permits: Multi-Family Unit Growth Poised to Soar, Single-Family Weak
32
,52
6
22
,85
5
7,8
63
11
,00
0
18
,50
0
73,200
39,788
27,51530,873 33,000
37,500
8,6
01
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2007 2008 2009 2010 2011F 2012F
Single-Family PermitsMulti-Family Permits
Annual Change, 2007 through 2012F
FL’s Construction Sector, One of Most Critical of FL’s Growth Engines, Remains in a Deep Recession
Single-family home construction in 2012 is
expected to be barely half what it was pre-crisis. Multi-family dwelling great is expected to rise by 68% in 2012 as people
shun homeownership or it remains beyond their means
Source: Dept. of Commerce (historical); Wells Fargo Securities (FL forecasts) as of September 2011; Insurance Information Institute.
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