HARTFORD — The prospect of a takeover of a Connecticut-based insurance giant sparked worries in the past few weeks among many elected officials about such a deal potentially sparking layoffs.
But that scenario no longer looms after insurance multinational Chubb last week called off its efforts to buy The Hartford. In turn, a number of public officials are expressing renewed confidence about the future of Connecticut’s insurance industry, which has sustained fewer job losses in the past year than nearly every other sector.
“This is the best place on the planet to be in the insurance business,” state Rep. Kerry Wood, D-Rocky Hill, co-chairwoman of the state legislature’s Insurance and Real Estate Committee, told Hearst Connecticut Media.
In the past year, the finance and insurance sector has lost a smaller percentage of its jobs than the Connecticut economy as a whole.
Finance and insurance: 100,700 jobs statewide (-1.7% year over year)
Connecticut economy: 1,580,300 (-6.1% year over year)
Finance and insurance: 102,400 jobs statewide
Connecticut economy: 1,683,300
Source: Connecticut Department of Labor
Acquisition offers rejected
Chubb announced that it would end its efforts to acquire The Hartford, after submitting three failed offers in the previous seven weeks. Its third and highest offer valued The Hartford at about $25 billion.
“The chapter with The Hartford is closed,” Chubb CEO and Chairman Evan Greenberg said in an April 28 earnings call. “We have moved along. Beyond that… I’m not going to now engage in talk about past events.”
The attempted acquisition alarmed state legislators, who were worried about its potential impact on the Connecticut operations of the 1810-founded The Hartford, which ranked No. 160 on last year’s Fortune 500 list. Employing about 6,100 in its home state, it comprises one of the cornerstone companies of the Hartford region, which is known as the “insurance capital of the world.”
In an April 14 letter to The Hartford outlining its third bid, Chubb had sought to allay concerns by pledging to make Hartford a “major technology and operations center,” but lawmakers remained skeptical about the proposal.
“I can feel the economy strengthening as we move towards 100 percent opening and through our commitment to the business community and workforce training,” Wood said last week, before Chubb announced the end of its pursuit of The Hartford. “This is Connecticut’s time to rebuild and recover, and any job loss or threat of job loss at The Hartford would be a major setback.”
Given The Hartford’s size, there appear to be few other companies large enough to acquire it. Insurance and asset management giant Allianz has studied the feasibility of making an offer, Bloomberg reported in late March.
In response to an inquiry from Hearst Connecticut Media, a spokesperson for Allianz said this week that “in general, we do not comment on market rumors or speculations.”
City officials, meanwhile, are focused on collaborating further with The Hartford. The company has been providing $3.3 million annually as part of a pledge made in 2017 with two other insurance giants, Aetna and Travelers, to give the city of Hartford a combined $50 million across a five-year span for community institutions such as the Hartford Public Library.
“The Hartford has been one of our strongest, most reliable and most dedicated partners,” Hartford Mayor Luke Bronin said in an interview. “I look forward to continuing to work with them hand-in-hand as we regain the momentum and energy that we had coming into the pandemic.”
Boosted by insurance companies’ ability to operate in remote-working environments, the industry has avoided the massive job losses that other sectors have such as leisure and hospitality have endured since the start of the coronavirus pandemic.
Statewide, about 101,000 people worked in finance and insurance in March — a decline of 1.7 percent from a year ago, according to the state Department of Labor. As a whole, employment in Connecticut has decreased 6.1 percent in the past year.
Education services and transportation, warehousing and utilities are the only two sectors in Connecticut whose employment levels have fared better in the past year — with their statewide headcounts, respectively, dropping 0.3 percent and rising 11 percent.
In response to an inquiry from Hearst about its hiring plans in Connecticut, The Hartford said in a statement that “we continuously hire as jobs become available across all of our functions and business lines.” The company did not specify the number of Connecticut-based openings.
Hartford is the “No. 1 location for concentration of insurance industry jobs, employing more than 63,500 Connecticut workers,” according to the website of Connecticut Insurance & Financial Services, a MetroHartford Alliance initiative.
“There’s no question that this pandemic is going to leave a lasting effect on work patterns, and we may well see companies keeping a hybrid of work-from-home and work-from-the-office,” Bronin said. “But I think there are also tremendous opportunities for us to continue building Hartford into a center of innovation in insurance tech and be a place where insurance startups and scale-up companies have enormous potential to partner with industry leaders. And I think we may also have enormous potential as a city to offer a much better deal for companies big and small that in the past have been paying a fortune to be located in places like New York and Boston.”
In Bloomfield, about five miles northwest of The Hartford’s headquarters, stand the main offices of Cigna, the largest insurance company headquartered in Connecticut. Cigna ranked No. 13 on last year’s Fortune list.
While the industry is concentrated in the Hartford region, it also maintains a significant presence in other parts of the state. Chubb and The Hartford have offices in Stamford, which is also a hub for re-insurance firms. W.R. Berkley, which ranked No. 402 on the Fortune list, is headquartered in Greenwich.
“We have more actuaries, legal expertise and highly skilled professionals in the industry than anywhere else,” Wood said. “The captive insurance industry is currently expanding here. More subsidiary industries that support our large insurers are growing and expanding. Plus, the state’s Department of Insurance is widely known as having some of the best and brightest. I can’t speak highly enough about the health of one of our largest industries.”
Messages left this week for state Sen. Tony Hwang, R-Fairfield, and state Rep. Cara Pavalock-D’Amato, R-Bristol, the ranking members of the Insurance and Real Estate Committee, were not returned.
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