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Study: Insurance industry’s impact on Nebraska economy is $10.3 billion

Nebraska’s insurance industry produces high-wage workers, contributes to a “brain gain” for the state and had an overall impact of $10.3 billion on the state’s economy last year, a new study shows.

The research by University of Nebraska-Lincoln economist Eric Thompson and Ernie Goss of Creighton University also found that on average, employees of the state’s insurance businesses earned $383 more a week than Nebraska’s other private-sector workers.

The study underscores the importance of the insurance industry to the state’s economy and in retaining highly skilled young Nebraska workers, Thompson said.

“The bottom line is that the insurance industry is a key basic industry for the Nebraska economy that contributes to brain gain in the state,” the UNL economist said.

Only in Connecticut and Iowa does the insurance industry exert more of an economic force than in Nebraska, the report shows. An estimated $413.2 million in state and local taxes and fees are generated from the industry, which supported 56,405 jobs with a payroll of about $2.6 billion in 2010. Insurance employment makes up about 3.5 percent of the state’s workforce.

Thompson said insurance premiums bring significant new dollars to the state every year. In 2009, the state’s insurance industry sold $8.3 billion in insurance premiums.

Also according to the report:

* Every $1 million in additional Nebraska insurance premiums creates about $1.8 million in overall economic activity, $450,000 in wages and salaries, $38,000 in self-employment income, $71,000 in state and local taxes and 9.7 jobs.

* Every 10 new jobs added in insurance firms in Nebraska results in another 7.6 jobs added in non-insurance firms in the state.

* In 2009, Nebraska insurance companies paid more than $93.9 million in taxes and fees to the Nebraska Insurance Department alone.

* In 2010, the insurance industry added an estimated $112 million to the food services industry and $111 million to the real estate industry.

Want to know more about how the insurance industry affects the state? Eric Thompson, associate professor of economics, is at (402) 472-3318 or ethompson2@unl.edu.

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