The bipartisan budget deal heading to the House may indirectlyimprove the U.S. insurance landscape, according to Robert Hartwig,president of the Insurance Information Institute.

“The budget deal is an unambiguous positive for the U.S. economyin general and P&C insurance specifically,” Hartwig tellsPC360. “The October shutdown took a toll on business and consumerconfidence, which translates into lower consumer spending, reducedinvestment activity by businesses and less hiring. All of these arenegatives for P&C insurers because they reduce the growth rateof new exposures [such as] property, liability, and for workers’compensation payroll exposures.”

The two-year bill, proposed by House Budget Committee ChairmanPaul Ryan, R-Wis. and Sen. Patty Murray, D-Wash., is an $85 billionagreement the politicians say mostly aims to avoid another governmentshutdown.

Hartwig says the timeframe should make greater inroads toreducing uncertainty rather than a deal “that merely kicked the candown the road for a few more months.”

A statement from Ryan says the bill would provide $63 billion insequester relief over two years, split evenly between defense andnon-defense programs, and would reduce the deficit by between $20and $23 billion, although news reports say this would occur overthe next decade.

“The deal restores some federal spending, which willbolster the economies of certain states and help offset weaknessesassociated with sequestration,” says Hartwig. “Agents located inareas with exposure to large defense contractors or other economicdependencies on federal spending had reported a slowdown inbusiness.”

The I.I.I. says the top states dependent on government spendingare Maryland, Virginia, Hawaii, Arkansas and New Mexico.

“The deal will reduce investor uncertainty and shouldtherefore have a beneficial impact on financial markets,” Hartwigconcludes.