The Connecticut insurance sector plays a vital role in the global insurance landscape and the state's economy, according to a report from the Connecticut Insurance and Financial Services (IFS) Cluster and PwC US. The report, released at the recent 2012 Insurance Market Forecast event in Hartford, highlighted the industry’s importance to the state, which was echoed in comments by the state Insurance Commissioner and Gov. Malloy. Commissioner Thomas Leonardi pointed out that “we regulate the 2nd largest insurance industry in America,” noting that “if Connecticut were a stand-alone country, we would be one of the 10 largest insurance producing jurisdictions in the world.” You can’t ignore this industry without putting the state in great peril.” Malloy said, stressing the need to both regulate the industry and view them as “partners” in job creation and economic development.
The 2012 Connecticut Insurance Market Report highlights the sector's rich history, current challenges and opportunities with analysis and findings from Connecticut IFS Cluster, PwC, and the Connecticut Economic Resource Center (CERC).
According to the report, Connecticut ranks first nationally in insurance employment as a percentage of total state employment and the industry represents approximately 3 percent of the state's workforce, 6 percent of the state's payroll and 9 percent of the gross state product. Full-time employment in the sector is said to be 50,242.
Insurance also impacts other sectors of the state's economy. The report says that one new job in the insurance industry adds an additional 1.46 jobs to the Connecticut economy; an increase of $1 in insurance labor income puts an additional $0.78 into state commerce; and every year the insurance industry purchases an average of $2 billion in goods and services from other industries in Connecticut.
"The inaugural Insurance Market Forecast is the showcase effort of that collaboration and will serve as a valuable guidepost as we expand our efforts to attract businesses and talent to our state," said James Bedard, IFS Chairman and Chief Financial Officer/Chief Operating Officer for UnitedHealthcare's Northeast Region. [CT-N video of event.]
Looking forward, the report emphasizes that competing globally, investing in education, retaining and developing human capital, and government-led economic development initiatives are essential to maintaining the state's leadership position in the industry and growing its economy. To drive that future growth, the report identifies the five key megatrends – social, technological, environmental, economic and political – that will influence the world's insurance industry, explaining their implications, and offering ideas and actions for embracing them.
A year ago, Gov. Malloy’s office noted that there are more than 65,000 people who work in the insurance industry in Connecticut, described as being down by almost 25% over the past 20 years. The report compares employment by state, highlighting the top nine: California (179,936); Texas (163,690); New York (144,077); Florida (134,393); Illinois (112,408); Pennsylvania (110,484); Ohio (108,492); New Jersey (81,119); Connecticut (61,583).
The State Department of Insurance, even as it promotes development of the insurance industry, also goes to bat for consumers. In the third quarter of 2012, the Department’s Consumer Affairs Unit (CAU) fielded more than 1,500 complaints and inquiries and helped policyholders recoup nearly $1.2 million. During that same period, the Market Conduct division levied more than $1.1 million in fines against carriers and returned that money to the state General Fund. The fines resulted from a variety of violations and settlements ranging from untimely claim payments to improper licensing. Since January 1, the Department has recovered more than $6.3 million for policyholders and state taxpayers.
The majority of the funds recovered for policyholders stemmed from complaints over health, accident, homeowners and life and annuities policies. The Department calculates its consumer recoveries based on what the policyholder received as a result of the Department’s intervention. The inquiries and complaints also help the Department identify industry trends that may adversely affect consumers. This data also helps determine topics for consumer education and as tools to help the Department monitor the industry. The Market Conduct enforcement actions are posted on the Insurance Department’s web site at www.ct.gov/cid