Entering September, Connecticut lost an opportunity to score more than 400 jobs, as rival Westchester County successfully lured a labor-insurance unit of American International Group Inc. to relocate there from Manhattan.
Weeks later, the state is just hoping its unemployment insurance rolls will not expand any further in AIG”™s unexpected meltdown.
In addition to local residents who commute to AIG jobs in New York City, AIG has a significant presence in Connecticut, with its subsidiaries including the Hartford Steam Boiler Inspection and Insurance Co., and AIG Financial Products Corp. and AIG Trading Group Inc., which share a Wilton headquarters acting as a credit intermediary for companies looking to trade in over-the-counter derivative securities.
Transatlantic Reinsurance Co. has an office in Stamford, a mini-hub for companies that issue reinsurance policies to help other carriers hedge against the risk of catastrophic losses in their policy portfolios.
As of 2006, AIG operated 25 subsidiaries that sell property and casualty insurance in Connecticut. Total AIG premiums in Connecticut were $460 million that year, giving it a 7 percent market share. That was third overall behind Hartford-based Travelers Cos. Inc., which wrote $590 million in premiums in 2006, and Allstate Insurance Co., with $470 million.
The Connecticut Insurance Department is not scheduled to release updated insurance premium figures until next month.
As ratings agency A.M. Best was lowering its grades on a swath of AIG insurance groups last week, New York regulators took the extraordinary step of allowing the company to borrow funds from its small army of subsidiaries.
Connecticut lost an open opportunity to poach one of those subsidiaries this month, after Amalgamated Life disclosed plans to relocate more than 400 headquarters personnel from Manhattan to White Plains. Amalgamated is taking 130,000 square feet of space in the former headquarters of General Foods, which more recently served as the office of a mortgage business that collapsed in the subprime crisis.
Amalgamated Life touts itself as “America”™s labor insurance company” selling life and disability policies to more than 1.1 million trade-union members, while also administering insurance and retirement plans offered by other carriers. In 2000, the company obtained a license to issue policies in Connecticut.
Westchester County officials actively lobbied for the company after learning it was considering relocating to Newark, N.J., and the Westchester County Industrial Development Agency (IDA) offered $500,000 in sales tax exemptions for renovations at the General Foods property.
While Amalgamated Life”™s chief executive officer reportedly told IDA officials the company would consider any site within 30 miles of Manhattan, the company apparently never seriously considered Connecticut, which in 2006 created a job-creation tax credit for such opportunities.
Fairfield County also has a significant cluster of carriers with underwriting expertise in both life insurance and property and casualty risks, including General Re Corp., Odyssey Re Holdings Inc. and Independence Holding Corp., all in Stamford; and W.R. Berkley Corp. in Greenwich.
Even if Fairfield County had been in the game, it might have been only a long-shot candidate ”“ Amalgamated Life CEO David Walsh previously was general counsel for Swiss Re, which employs nearly 800 people at its U.S. headquarters in Armonk, N.Y.
While a large number of Swiss Re workers commute from Fairfield County, Walsh has extensive Empire State connections as a board member of the Insurance Federation of New York and the New York Council of the Boy Scouts of America. He also has taught at Pace University, which has campuses in New York City and White Plains.
”“ John Golden contributed to this report.
