So far, first-quarter releases and calls are rolling out in fairly orderly fashion with the biggest question being whether reserve releases are realistic and the biggest debate being whether some companies should have pre-released their catastrophe losses (and not “missed” consensus). Reflecting conversations with a few analysts over the past several weeks, I’m planning to look at the “to pre-release or not” topic for insurance companies in time for consideration for the second quarter.
In the meantime, I was reminded by an SNL marketing email of one valuable way insurance companies can address another topic — helping investors see their potential as the market hardens. SNL is promoting their “Market Demographics” template. According to their email, it’s a “pre-built model” that let’s you “view comprehensive data on key demographic indicators, including population, median income, home value and unemployment” by state, county or MSA. In other words, they are making it easy to do useful research.
The economic recovery is expected to be a major factor in the return to premium growth. But not all markets are equal and supporting your company’s specific plans with market data can help make your case.
For example, when talking about geographic expansion, population growth is expected be above 7% over the next five years in Arizona, Georgia, Idaho, Nevada, North Carolina, Texas and Utah (compared with a 4.6% average for the U.S.). If these are your target states for expansion, you may be able to bolster your case for your outlook.
Or you may already be seeing growth in some states (supporting lagging results in others). You could make a case that you are seeing quality business opportunities if the growth was in Hawaii, Iowa, Kansas, Louisiana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Utah and Vermont. In those states, March unemployment was below 7.5% compared with a 9.7% average for the U.S. This type of data also may add color to discussions of audit premium trends.
* InsuranceIR LLC purchases SNL data services and participates in their “IR Partner Program.” Under the terms of that program, any company that contracts for services from SNL based on my recommendation receives a $500 credit on their initial bill. InsuranceIR does not receive any cash compensation for referrals. By participating in various marketing activities with SNL, I may receive non-cash benefits, such as higher visibility.