By the BF Staff
From the November/December 2020 Issue
As the “Insurance Capital of the World,” the Hartford Region plays a prominent role in the history of the insurance industry and it is leading the charge with a skilled workforce, an ideal and strategic location for cutting-edge advances in InsurTech innovation.
According to the Bureau of Labor Statistics (BLS), Connecticut’s insurance sector is a significant part of the state’s economy, creating more than $16 billion in output in the region. While the insurance landscape continues to evolve, the state’s insurance and financial services (IFS) companies are implementing strategies and technologies to enhance the customer and employee experience and create timely, innovative solutions to today’s challenges.
Serving as headquarters for globally leading insurance companies, including Aetna, ConnectiCare, The Hartford, HSB and Nassau—and home to major operations by Prudential, Travelers and UnitedHealthcare—CT Insurance Market Brief acknowledges that the Hartford Region boasts more than 70,396 employees who work in insurance-related jobs. Executives from these renowned insurance companies collaborate to enhance Connecticut’s economy through efforts like Connecticut Insurance and Financial Services (CT IFS), an initiative of the MetroHartford Alliance.
“What’s unique about CT IFS is the confluence of C-suite and executive leaders who leave their competitive hats aside to work collectively on strategic initiatives designed to strengthen and advance the industry in our State,” explains CT IFS Vice President and Executive Director Susan Winkler. “Since 2003, the CT IFS Board has leveraged Connecticut’s IFS industry across the U.S. and the world as a competitive advantage for growth in economic development.”
Per BLS, Hartford is also the #1 state in insurance jobs per capita. And, according to the labor market analytics firm, EMSI, with nearly 1,000 actuaries working in the state, Connecticut has the highest concentration of actuaries in the United States.
A STRATEGIC LOCATION FOR BUSINESSES
It’s no secret that Boston and New York are conveniently located next to Hartford, which enables IFS industry leaders to easily connect for meetings, networking and events within a two-hour drive or commute via public transportation. One of the key advantages is the cost of living, which the Council for Community and Economic Research says is 21 percent less than Boston and 37 percent less than New York City.
For example, a 20,000-square-foot Class A office user can save over $700,000 per year in combined lease costs and state/local taxes over Boston and over $1 million annually when compared to New York City, according to the MetroHartford Alliance—CohnReznick Report, 2020.
In the current business climate, it’s also significant to note that Best Places ranked Hartford #3 mid-sized city for teleworking in 2020, while in 2019 the New York Times ranked it a top 10 destination for millennials and Bloomburg listed it as a top five location for innovation.
Connecticut’s IFS industry also plays a key role in the worldwide insurance sector. Hartford is globally recognized for its innovative InsurTech ecosystem and the region draws companies from all over the globe. In 2018, multinational information technology corporation Infosys selected Hartford as one of six locations in the United States to house a regional Technology and Innovation hub, helping accelerate Hartford’s and Connecticut’s distinction for its innovation ecosystem.
Hartford’s moniker as “The Insurance Capital of the World” has helped draw interest from international startups in the InsurTech space, like Australian-based Flamingo Ai, which came to Hartford “because it was the right place for us to be,” says Head of North American Operations Bob Hilborn.
Early-stage InsurTech companies choose the Hartford Region because they recognize the value of locating in one of the world’s strongest insurance clusters, where they’ll find the resources needed to solve global issues in life, annuity, property and casualty, reinsurance and digital health markets.
Brookings Institution (2018) says Hartford is a Top 5 economy in terms of digitalization, and it’s at the forefront of InsurTech innovation. Hartford executives understand how to innovate and adapt to changes in their economy. They comprehend how shifts in perspectives and new solutions are driving acceleration and innovation in the insurance industry.
With access to resources and key players in the industry, Hartford is well-positioned as an InsurTech hub. “The concentration of insurance companies in Hartford and Connecticut makes a strong case for startups seeking partners with our local insurers and for companies looking to expand into a market that fully understands the new world of insurance,” says Nassau Chief Marketing Officer Paul Tyler.
Seasoned, growing and early-stage InsurTech companies recognize Hartford as an innovation hub and want to locate their businesses in the Hartford Region. According to Launc[H]artford, over the past three years the region has fostered nearly 800 entrepreneurs and helped or scaled up more than 200 businesses.
Choosing a location for their InsurTech startup was an easy decision for Combined Ratio Solutions, which saw key advantages to being near large insurance companies. “There’s a history of insurance operations starting and being successful here,” explains Co-Founder and COO Luke Magnan. “It’s something Hartford does and there’s a certain cache to being in Hartford.”
In Hartford, the future for insurance is steeped in its history of success and strong foothold in innovation.
“The tens of thousands of employees in the Insurance Capital with their years of experience and exceptional industry knowledge cannot be underscored,” emphasizes ConnectiCare President Eric Galvin. “We are steadfastly positioned to continue managing the evolution and innovation of the insurance industry as we establish best practices for the U.S. and the world.”
NEW JERSEY IS AN INSURANCE AND FINTECH POWERHOUSE
Whether you are in banking, insurance, fintech, consulting, data analytics, or accounting, one thing is clear: New Jersey is a major finance and professional services hub. Over 26,600 finance and professional services firms call the Garden State home, 800+ of which have more than 500 employees.
It’s not surprising that the Finance and Professional Services sector is a major contributor to the state’s economy, accounting for nearly $67 billion in GDP and employing more than 370,000 of New Jersey residents—The sector is also rapidly expanding, with more than 14 percent growth since 2013.
NJ’s strength in Finance and Professional Services is built on a set of unique advantages. NJ is located in the heart of the Northeast Corridor, next door to the world’s financial capital, offering world-class services at a fraction of the price. For example, office space is 40-60 percent cheaper in New Jersey than in other nearby markets and has some of the best digital infrastructure in the U.S. (e.g., #1 state in percent of population with access to wired broadband of 25 mbps or faster, #2 in average download speed, and #2 in percent of population with access to fiber-optic internet).
For all these reasons (and more) Gov. Phil Murphy’s 2018 Economic Development Plan identified Finance and Professional Services as a focus sector for the State. The NJEDA is committed to being a strategic partner to the State’s banking, investment management and insurance companies as well as professional services firms in tax, accounting, marketing/advertising, law, business and management consulting and technology/engineering services. Whether you are a global giant or a nimble start-up, the New Jersey Economic Development Authority (NJEDA) will work to help you develop and expand your workforce and support the innovation of new products and services for your clients.
The insurance industry contributed $19.9 billion to NJ’s gross state product (GSP) in 2017, accounting for 3.34 percent of the state GSP; provided 105,977 jobs in the state in 2018, according to the U.S. Department of Commerce; and accounted for about $12.5 billion in compensation in 2018.
New Jersey’s insurance industry employs licensed professionals, pays taxes, owns municipal bonds and serves people in times of need.
A highly-educated workforce and a strategic location just minutes from Wall Street have helped make New Jersey a top choice for financial services companies. Many of the world’s leading companies have headquarters or significant operations here, including 12 of New Jersey’s top 75 employers. In fact, with 11,420 business establishments employing nearly 179,000 workers, the financial services and insurance sector is a major force in the State’s economy, contributing more than $31 billion annually.
New Jersey also has become an attractive location for companies in the emerging Financial Technology (FinTech) industry, a fast-growing sub-sector that utilizes technology to deliver next-generation banking, credit and investment services. Today, four of the world’s top 100 FinTech companies are headquartered in New Jersey.
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