NU Online News Service, Oct. 12, 2:08 p.m. EDT

ORLANDO, FLA--Federal Reserve Chairman BenBernanke declared that the recession is "very likely over," but thepace of recovery will be uneven across states and industries,according to a leading insurance industry economist.

Robert Hartwig, president of the New York-based InsuranceInformation Institute, referring to Chairman Bernanke'smid-September remarks suggesting that the recession very likelyended in June, said, "Don't tell that to the 10 percent of peoplethat don't have a job today."

He spoke Friday at the annual meeting of the NationalAssociation of Professional Surplus Lines Offices, Ltd. during theDerek Hughes/NAPSLO Educational Foundation Lecture.

Mr. Hartwig gave excess and surplus lines market participantssome glimpse of near-term pockets of opportunity for top-linegrowth, but he warned that the economic recovery won't really be infull swing until people feel better about their jobs.

At one point during his lecture, he noted that the publishedlevel of unemployment--9.7 percent of the workforce--is actually anunderstatement of the true figure. When you add in underemployedworkers (people who want to be full-time workers but are only parttime) and discouraged workers (those who just stopped looking), theunemployment rate balloons to 17 percent of the overall workforce,Mr. Hartwig revealed.

He also said that unemployment rates typically continue to risesix-to-nine months after recessions end.

"This has real impacts on workers' compensation exposure," hesaid, highlighting just one property and casualty insurance linewhere premium growth is being sliced by economic factors.

"We do not catapult out of recessions typically," he said, alsopresenting some information on home building and new businessstarts, which directly impact excess and surplus lines carrierswith books of business in the construction trades or focused oninsurance for new ventures. New business starts "plunged" to thelowest level since 1995 in fourth-quarter 2008, and "we're waitingfor that to come back [up] now," he said.

Delivering good news amidst the sobering statistics, Mr. Hartwigbegan his presentation with some indicators that indeed support theidea that the recession "technically" ended in June.

That would mean that the recession was 19 months long, Mr.Hartwig said

At this meeting last year, "we were in the eye of the [economic]storm," he said, noting that gross domestic product was shrinkingat 5.5 percent annual rate.

Reviewing the GDP figures for this year, he said that after adiscouraging start--6.5 percent shrinkage in the first quarter--thefigure is now down to minus-0.7 percent for second-quarter 2009,and it's like to reverse direction--so that the GDP will grow inthe third quarter, he said.

Recoveries last a long time--six-to-eight years, Mr. Hartwigadded.

Focusing on near-term implications, Mr. Hartwig said, "Thereality is we don't have one economy, we have 50 economies."

While some parts of the country won't start recovering for ayear, "there's a swath of the United States from Texas up to theMountain states and through the Great Plains" that is doingrelatively well, he said. The states that have stronger economiesnow are agriculture-intensive, energy-intensive, and naturalresource-intensive states, he said

Using job growth as a measure of recovery, Mr. Hartwig pointedto North Dakota as the state with the lowest unemployment rate,followed by Wyoming and South Dakota.

On the other hand, heavy industrial states like Ohio, Michiganand Indiana continue to do poorly, he said. Also states likeFlorida, Nevada and Arizona, which were hit hardest by the burst of"the real estate bubble," are also laggards in terms of economicrecovery, he said.

Mr. Hartwig also identified 11 employment sectors that hebelieves have the best growth potential over the next 10 years:

He mentioned government, education, health care, traditionalenergy, alternative energy, agriculture, natural resources,environmental, technology, light manufacturing and export-orientedindustries.

Seek business with firms that have government contracts, headvised his audience. Regarding export industries, he said,"Several of these are plays on the long-term weak dollar."