Impact on local insurance carriers
I’ve been asked to provide information about the value new jobs in other industries represent to local health insurance carriers. Examples of recent new jobs added to the local economy 200 direct jobs in IMPLAN sector 414 510 direct jobs in IMPLAN sector 510 Local insurance carriers are asking – how do these jobs impact our industry? The Impact Detail for Output report for these projects shows the following data Sector Description Direct Indirect Induced Total 200 direct jobs 437 Insurance carriers 0.0 309,682.5 386,672.0 696,354.6 510 direct jobs 437 Insurance carriers 0.0 536,674.0 986,247.6 1,522,921.6 Do the Impact Detail for Output figures mean that local insurance carrier SALES are increased annually by the totals shown? Thank you, MH
Hi Miriam, Thank you for your post! I can appreciate the complexity of your study. To answer your question about how to interrupt the Output for the Local Insurance Carriers. You are correct that this is increased annual sales. A couple things to think about: 1. If these are new businesses and their workers are new residents to the area, the analysis is as simple as as using the Industry Change Activity - the input suppliers and workers are all assumed to purchase insurance of all types according to the average rates of insurance purchasing by those industries and households in that region. However, if these businesses are not new but merely expanding and/or these new workers are not new to the area, they may have already been purchasing insurance there, which would mean that the impact results are a bit overstated. The businesses most certainly will increase their purchase of health insurance even if they already existed in the region because they now have more workers to pay for. However, does a business increase their other types of insurance coverage based on their sales? Regarding the workers, if they already lived in the area they may have been employed elsewhere and thus already had insurance, or they could have been unemployed and not had insurance. Even if they did already have some form of health insurance, they may still increase their purchases of other types of insurance (e.g., life) if they now have a better job and feel inclined to pay more for insurance. So..... the report should mention some of these caveats and perhaps categorize the impacts as being an upper bound. 2. In addition to sector 437 (insurance companies), we recommend including the impacts on sector 438 (local brokers) as well!
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