The A List

Insurance takes a different spin

Industry Outlook

Larry Michael, a producer with Brehmer Agency Inc., an insurance firm in Butler, said a recent slowdown in construction activity is part of a natural cycle.

After 35 years in the business, Michael said he’s used to seeing the construction market shrink and expand.

Michael said the effect of contraction in construction on the insurance industry is two-fold.

On the surety bond side, he said, business slowed because fewer contracts mean fewer bonds.

But on the commercial business insurance side, which includes workers compensation and liability, business is stable, Michael said, and continues to be profitable.

Michael said the insurance industry eventually will feel a hit from a sputtering economy.

“We’ll be feeling the pain of smaller premium amounts,” Michael said. “Fewer labor hours means fewer sales of construction [insurance].”

Michael said he’s unsure when the construction industry will swing back toward the expansion and growth side of the cycle.

— Lawrence Silver