Why Iowa is the New Insurance Capital of the Nation
Pro-Business Environment Drives Statewide Expansion
Iowa is well-known for its abundant cornfields, strong work ethic and spirited caucuses that launch the presidential primary process every four years. But in the last five years, the state also experienced a boom in its business sector — boasting GDP growth of 45% in the insurance and financial services sectors alone. By attracting some of the largest companies in those industries, Iowa has cemented itself as one of the nation’s top insurance and finance hubs.
“Iowa offers a pro-business environment where innovation and growth aren’t only encouraged, they’re incentivized,” says Michael Gould, manager of business development, Iowa Economic Development Authority (IEDA).
One clear incentive is the state’s insurance premium tax rate—at just 1%, it’s one of the lowest in the country. Additionally, state leaders have enacted policies and programming that help finance and insurance companies hire, train and employ more skilled workers. For example, Iowa public colleges and universities offer 24 bachelor’s degree programs in accounting and 21 bachelor’s degree programs in finance, as well as three of the top 25 actuarial science degree programs in the country, which create a rich pipeline for the state’s insurance firms and financial institutions.
Thanks to the state’s forward-thinking vision for the insurance industry, it’s no surprise that Iowa is the birthplace of numerous advancements in insurtech. Several of these advancements trace their origins back to Iowa’s Global Insurance Accelerator (GIA), the world’s first business accelerator specifically geared toward insurance technology.
Founded in 2015, GIA is a mentor-driven program designed to foster innovation by connecting well-established insurance companies with startups that are driving the future of the global insurance industry. During the 100-day immersive experience, early-stage startups can glean insights about the industry from executives to whom they may not have otherwise had access. In turn, executives are able to see firsthand emerging technologies that could advance the field.
But it’s not just about insurance and finance in Iowa. State agencies have also been particularly helpful in the midst of COVID-19, going the extra mile to support impacted businesses through relief grants, tax deferrals, assistance with access to federal resources and workforce development initiatives. Thanks to these targeted efforts, Iowa has seen minimal business closures, despite the national and global challenges created by the pandemic.
“Iowa’s diverse economy provides the ideal climate for business growth and innovation,” says Gould. “Our nationally recognized research centers and low cost of doing business give companies operating in the state a huge competitive edge.” And as businesses reopen and rethink what’s next, there’s no doubt many of them will have their eye on the Hawkeye State.
This article was originally published December 1, 2020, as sponsored content in Fortune magazine.