Economic Analysis Has Connecticut Headed Upward at Mid-Year, AI Growing Across Insurance Industry
/Conning’s annual State of the States Report is an annual ranking of the 50 U.S. states by credit quality, based on the company’s examination of economic conditions, socioeconomic trends, and the states’ balance sheets.
A leading global investment management firm with a long history of serving the insurance industry, Conning has North American operations centered in Hartford, with additional offices in Boston and New York City. The company was founded in 1912. Investment centers are also located in Asia and Europe.
The most recent annual report, published in June and highlighting FY2025 data, reviews the data upon which analysis and conclusions are based. This year’s rankings showed significant movement across the board, reflecting both the company’s “refined methodology and changing economic conditions.”
The analysis, released mid-calendar year, pointed out that the “fiscal outlook is further complicated by emerging challenges ranging from immigration and high-impact weather events to housing affordability (which remains a concern across regions) and insurance market stability.” The comprehensive analysis of state economic conditions involves key metrics such as real GDP growth, GDP per capita, employment growth, and unemployment rates, according to Conning.
Idaho claimed first place in the report, with an impressive 11-position climb. But Northeastern states - including Connecticut - also showed leaps forward.
Connecticut (9th), New York (21st), Delaware (25th) and Massachusetts (15th) also showed what was described as “remarkable improvement,” jumping 30, 23, 20 and 18 positions, respectively, partly due to their resilience against catastrophic losses, according to the analysis.
Connecticut ranked 8th in tax revenue growth, 15th in unemployment rate average, 18th in population growth, 23rd in GDP growth, and 47th in tax climate.
Reaching the top 10 states in the 20-page Coning analysis was a substantial jump forward for the state, which placed 39th in 2024 and 38th in 2023.
Among the substantial areas of improvement for Connecticut were in reserves and tax revenue growth, among other factors.
Also this year, Conning issued a report highlighting how U.S. insurers are increasingly integrating artificial intelligence into their workflows” across impact areas, prompting a shift toward upskilled workers and key implications for cyber risk management.”
“With 90% of the respondents in some stage of Generative AI evaluation and 55% in early or full adoption, Generative AI has shown the strongest uptick amongst all AI technologies. Insurers are ramping up their investment in and adoption of AI as an integral part of their workflow,” said Manu Mazumdar, Head of Data Analytics and Insurance Technology, Insurance Research at Conning and author of the report.
The industry survey reveals several trends in AI adoption across the industry, the report indicates, including:
Generative AI gains prominence – While utilization of GenAI was minimal in last year’s analysis, 55% of respondents now report that they are at either early or full adoption stages.
AI increasingly leveraged for claims – Alongside other areas of business, operations and claims processing represent key areas where insurers are integrating AI to improve efficiency and decision-making.
Insurance workforce transformed by 2035 – As AI streamlines repetitive tasks, industry roles will be adjusted to value more customer relationship skills and technological literacy, demanding new skills and thus reshaping the traditional career ladder.
Cyber risk both created and mitigated by AI – While advanced tech increases potential entry points for cyber-attacks, AI also revolutionizes insurers’ threat detection and mitigation strategies.
