Workers' compensation will likely be the property-casualty line to benefit most from the economic stimulus package signed into law by President Barack Obama, although it may be quite awhile before insurers see any boost in their premium volume, according to Insurance Information Institute President Robert P. Hartwig.

Indeed, if the administration's target of 3.5 million jobs created or preserved is realized, that would translate into $1.1 billion in private workers' comp premiums, Mr. Hartwig predicted during a webinar put on by the Institute and Fireman's Fund Insurance Company, on "How the Economic Stimulus Plan Will Impact the Property-Casualty Insurance Industry."

However, he said the stimulus package is unlikely to increase net premiums written by more than 1 percent--or about $4.5 billion in total--while warning that since the package is only now being rolled out, insurers will likely not see its effects until year-end 2010.

The direct impact of the stimulus package on p-c insurers, Mr. Hartwig said, will result primarily from increased demand for commercial insurance coverages.

He noted the package contains no direct provisions that specifically address p-c insurance--with respect to spending, aid, or tax reductions--unlike direct benefits granted to other industries, such as auto, homebuilding and health care.

But that doesn't mean there won't be opportunities for insurers, according to Mr. Hartwig, who said infrastructure expenditures will result in an increased need for insurance on workers, property and to protect against various liability risks.

Construction spending, he noted, is likely to have the most direct impact on commercial insurers. Carriers that work with contractors are going to see increased demand for the types of coverage necessary for infrastructure projects, Mr. Hartwig said.

Insurers should expect overall growth in the role of government as a result of the stimulus, Mr. Hartwig observed, adding that the industry must maximize the benefits of such a paradigm shift.

With the increased focus on energy efficiency and alternative energy solutions from the Obama administration, Stephen Bushnell, senior director of commercial insurance for emerging industries at Fireman's Fund, said insurers could find new coverage opportunities, but they also need to understand the risks.

For example, he said the liability arena around green construction is largely unexplored. Building owners and contractors will be trying to understand their obligations, what is expected of them, and what promises and guarantees they may have to make with respect to these new "green" initiatives.

Speaking at an earlier gathering, Harry Ennevor, president of E.G. Bowman Company, a New York-based insurance brokerage, agreed that the jobs created by the Obama stimulus plan will increase the purchase of insurance.

"Companies working on highway, infrastructure, housing, school and technology projects will all require insurance for their operations, plus workers' compensation, travel-accident and health insurance for their employees," said Mr. Ennevor, speaking to the Jamaica Stock Exchange and Capital Markets Conference in Montego Bay, Jamaica.

"President Obama hopes that the plan will preserve or create three to four million jobs--and many of them will be in the insurance industry, both at carriers and brokers," he added, according to a release of his remarks by Bowman. "The stimulus package is a positive for not only the industry but also for the U.S. and world economy."

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