Lansing employs 20 percent of state’s insurance industry

LANSING – Michigan’s insurance industry had a $37.1 billion economic footprint in 2014, according to a new report on the industry.

The industry spent $16.4 billion in the state that year, including $3 billion in wages to its more than 41,000 direct employees, and supports a total of 114,000 jobs in the state, the report said. It paid $500 million in taxes to the state and local governments.

The report, paid for by several business organizations and insurance advocacy groups, including the Lansing Regional Chamber of Commerce and the Lansing Economic Area Partnership, was released Monday at the chamber’s downtown offices.

Conducted by the Anderson Economic Group, the study measured the economic footprint of the sector including both direct spending and taxes paid to the state and the indirect effect of insurance companies’ economic activity.

“This industry is a huge part of the local economy and state economy,” said Bob Trezise, president and CEO of LEAP. “This report helps shape the understanding of the insurance industry and shifts its image.”

Lansing’s insurance industry accounts for nearly 20 percent of the sector’s workforce in the state, employing roughly 7,300 people of the total 41,000 direct jobs, the report said.  Together with the local financial industry, which is in the same sector, there are nearly 10,000 employees in Ingham, Eaton and Clinton counties

Lansing is expected to pass the 10,000-worker milestone this year as Jackson National Life Insurance Co. adds 350 employees to keep up with its growing customer base. Jackson National employs 2,600 people locally. This fall, it opened a $60 million expansion to its Alaeidon Township headquarters to house 800 information technology and legal associates. The new building was part of a $100 million investment by the company to expand and update its facilities.

Industry leaders said reaching 10,000 employees will qualify the region as an insurance hub, which can attract more businesses to relocate to the region.

Two east coast insurance companies have expressed interest in the Lansing region and will be visiting sometime soon, Trezise said, adding that the companies were impressed by the statewide report and the region’s insurance workforce.

The average salary in the insurance industry is $85,000, according to the report. The average salary in industries across Michigan is $59,000.

“Our industry provides a lot of good jobs,” said Lori Conarton, communications director at the Insurance Institute of Michigan. “They do drive the economy and during a recession, it’s a stable industry, because people still need to buy insurance.”

The Lansing region is home to six major insurance companies – Jackson National, Accident Fund Insurance Co., Delta Dental of Michigan, Auto-Owners Insurance, Farm Bureau Insurance of Michigan and Michigan Millers Mutual Insurance Co. – and numerous other smaller agencies and branches.

No extensive report has been conducted on the impact of the industry on the region, but Daman said the LRCC plans to work with the Anderson Economic Group to produce a report.

Originally published by the Lansing State Journal