Insurance

1
Insurance Financial Services Cluster
Shared Action for Growth
Connecticut Economic Summit January 12, 2005
2
IFS Cluster Industry Collaboration for
Economic Vitality
Lincoln Financial MetroHartford
Alliance NewAlliance Bank Northeast Utilities
Peoples Bank Phoenix Wealth Management Pricewate
rhouseCoopers Prudential Retirement St. Paul
Travelers Sovereign Bank State Farm Travelers
Life Annuity/Citigroup Uniprise/UnitedHealth
Group Webster Bank
The Advest Group/AXA ConnectiCare Congressman
John Larson Day, Berry Howard LLP Department of
Economic Community Development Evolution
Benefits Ernst Young Fleet Bank/Bank of
America The Hartford Financial Services
Group Hartford Steam Boiler Inspection
Insurance Company/AIG ING Group Insurity
Sponsors
3
The IFS Cluster - Industry Collaboration for
Economic Vitality
4
Mission Focus Advancing CTs Insurance
Finance Industry

• Mission
• Advance and protect the IFS business climate
• Collaboratively address threats and opportunities
  
• Goal
• A dynamic and expanding IFS industry in
  Connecticut
• Global recognition as an IFS Center of Excellence
  
• Strategy
• Business-led collaboration with education and
  government
• Enhance the competitive strength of IFS companies
• Develop a cadre of qualified and experienced
  employees
• Expand employment opportunities
• Increase workforce diversity

Mission
5
IFS Cluster Operational Plan Top Priorities
for Collaborative Action

• Develop our Workforce
• University of Connecticut Risk Management
  Insurance Studies
• University of Hartford Entrepreneurial Program,
  Actuarial Studies, Leadership Devl.
• Central Connecticut State University Risk
  Management Insurance
• Trinity College Career Service Engagement
• Connecticut Community College System IT
  Education, Customer Service, Best Practices
  Seminars, Healthcare Curricula, NASD Series
  Preparation
• Promote the State and Region
• Business Recruitment North Carolina Mutual
  Life, Fidelity, ING corporate, Colonial
  Supplemental, Mellon Financial
• National Conferences Risk Insurance
  Management Society, LOMA, LIMRA, American Bankers
  Association, Health Insurance Association of
  America, Securities Industry Association, CoreNet
• Build State Support
• Public Policy Platform, with focus on job growth
  and company formation incentives, health care
  cost containment, Terrorism Risk Insurance Act

Operational Plan Sample Accomplishments
6
Connecticuts Insurance and Finance Industry
Critical to the State

• Contributes 13.6 to Gross State Product
• GSP contribution grew from 8.3 in 1990 to 13.6
  in 2000.
• Employs 125,600, in 5,550 establishments
• Accounting for 8 of total Connecticut employment
• Insurance 71,900
• Finance 53,700
• Connecticuts Insurance Leadership
• Greatest concentration of insurance jobs among
  the states, with 3.5 of total employment found
  in this sector.
• Ranks 4th in absolute size of insurance output.
• Led the nation in market share growth from
  1990-1999, when its share of national insurance
  industry output grew from 5.1 to 6.1.
• Growth Prospects High in Sectors
• Financial Services, 12 growth projected
• Customer Service, 20 growth projected
• Computer Support Engineering, 58 to 68 growth
  projected

Source CT Dept of Labor, A.M. Best. Employment
figures reflect 2002 data. Growth projections
relate to period 2000-2010.
CTs IFS Industry
7
Connecticuts Insurance, Finance, Real Estate
Jobs
Number of Employees (000s)
CTs IFS Industry
Source CT Dept of Labor
8
Connecticut Insurance Segment Employment
Number of Employees by Year
Source CT Dept of Labor
CTs IFS Industry
9
Connecticut Finance Segment Employment
Source CT Dept of Labor
CTs IFS Industry
10
Connecticut - Top 10 State Location for Insurers
State Comparisons
State Comparison Number of Insurers (Domestic)
2001
Property and Casualty
Rank
Rank
Life/Health
VT TX NY IL PA WI CA OH FL CT IN NJ MI MA IA NC MN
AZ NE GA LA NH SC WA AL CO ME
AZ TX NY IL LA OH IN PA CT CA WI IA FL NE GA MN MA
MI AL WA SC CO NC NJ NH ME VT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
21 22 23 24 25 26 27
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
21 22 23 24 25 26 27
Source NAIC report, 2001 Insurance Department
Resources Report. Twenty seven leading insurance
states.
CTs IFS Industry
Selected states with large numbers of PC and
L-H insurers.
11
IFS Employment Fluctuations - Ramifications for
Connecticut Given the Industrys Contribution to
Connecticuts Economy
State Comparisons
State Comparison Economic Impact of Insurance
Industry on State Economy1999 (latest year
available)
Insurance Industry Monetary Contribution to 1999
Gross State Product, Billions
Percentage Contribution to 1999 Gross State
Product, Percent
Rank
Rank
CT IA NE ME MN NJ NH PA IL WI MA FL CO NY OH GA TX
AZ VT SC IN CA WA AL NC LA MI
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
21 22 23 24 25 26 27
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
21 22 23 24 25 26 27
CA NY TX IL PA FL CT NJ OH MA GA MN MI WI NC WA CO
IN IA AZ LA AL SC NE NH ME VT
CTs IFS Industry
Source NAIC report, 2001 Insurance Department
Resources Report
Selected states with large numbers of PC and
L-H insurers.
12
Promotion of Our Strengths Not Reaching the
Players that Count

• Site Selectors and Location Brokers
• Connecticut is not on anyones radar screen.
• Aggressive marketing needs to be done to
  establish Hartfords brand.
• Need to reach the decision-makers. That is not
  being done.

Source Best Business Climates by Region from
Development Counsellors International, September
2002. Study reflects the percentage of business
executives citing regions of U.S. as offering the
best business climates. Interviews conducted with
site selectors and commercial real estate
brokers, 2003, Robert Flynn, Executive Director,
IFS Cluster.
Public Policy Issues
13
Primary Competitors Including Iowa, New York,
Illinois Have Implemented State Strategies
Focused on Insurance Jobs

• Iowas Dedicated Strategy
• In 1990, Governor launched effort to make Iowa
  the nations top insurance state by 2000.
• Established unified approach to business
  attraction that transcends political
  administrations and connects agencies
• Director of Insurance Business Development is
  point person for insurance-related business
  attraction.
• Commissioners office and state insurance
  association actively promote Iowa as a place to
  locate insurance jobs.
• Iowa representatives frequently visit
  Connecticut executives.

Total Number of Insurers Iowa 1,449
Connecticut 1,104
Number of Insurance Jobs
Iowa has created 11,300 jobs since 1990, a 39
increase
71,900
39,526
CT has lost 8,290 jobs since 1992, a 10.3
decrease.
Sources Insurance Times, March 5, 2002 Bests
Review Property Casualty Edition, November
1994 IFS Cluster interviews, 2003. IFS Cluster
Accenture analysis
Case Study Iowa
14
Vermont State Drives Strategy to Become
Industry Leader

• Vermonts Dedicated Strategy
• Governor commits to overtaking Bermuda as
  worlds largest captive domicile and heavily
  promotes the industry.
• In 1981, Vermont state officials pass Special
  Insurer Act
• Vermont Dept. of Banking, Insurance,
  Securities creates Captive Insurance Section,
  dedicated to attracting and serving the captive
  insurance business.
• Trade association attributes success to state
  investment, The accessibility to the governor
  has been incredible.

• 1,064 new jobs
• 20 million in fiscal benefits to state at
  investment of 1 million
• 850 million deposited in Vermont banks

of Captives
Sources Insurance Journal, August 23, 2004 Risk
Insurance, August 2002 and April 14, 2003
Boston Globe, December 12, 2003 IFS Cluster
analysis
Case Study Vermont
15
Development of Best Practices Approach to
Industry Growth in Connecticut

• Building Consensus for Action
• Addressing Public Policy Substantive Issues
• Taxes,
• Healthcare Cost Management,
• Others, including transportation
• Addressing Investment in IFS Business
  Attraction and Retention
• Dedicated IFS business development personnel
• Adoption of focused strategy to grow IFS
  companies and jobs

16
Insurance Financial Services Cluster
Robert Flynn Executive Director Insurance
Financial Services Cluster 860.728.2271 RFlynn_at_met
rohartford.com
January 2005