Possible Aetna move prompts focus on urban, state policies

AP News
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Posted: Jun 01, 2017 8:21 PM
Possible Aetna move prompts focus on urban, state policies

HARTFORD, Conn. (AP) — Connecticut officials are again re-examining how they can dissuade companies like General Electric and now possibly insurance giant Aetna from relocating to places considered more innovative.

A string of state budget deficits, state and local tax policies, as well as hefty state debt obligations are all being blamed for why Aetna and others may be looking to places like Boston to move their headquarters and attract talent. But many also are looking at the condition of Connecticut's cities and how they measure up against the competition in other states.

"Our inactivity, our unwillingness to come up with an overall goal for our urban centers in the state of Connecticut is yet again costing us dearly," said Democratic Speaker of the House Joe Aresimowicz on Thursday, the day after Aetna's chief executive announced his company is in negotiations with several states to move its headquarters out of Hartford, where it has been based for nearly two centuries. He said major employers "want to know what our plan is" for Connecticut's cities, adding how lawmakers may pass legislation this session that could lead to more state aid and stronger oversight of city spending.

Aetna's possible move comes despite Democratic Gov. Dannel P. Malloy offering the company financial incentives to stay in Connecticut. Aetna has not responded to the offer.

Mark Bertolini, Aetna's chief executive officer, said the insurer remains committed to its roughly 6,000 Connecticut-based employees and its Hartford campus. However, he said the company wants to broaden its access "to innovation and the talent that will fill knowledge economy-type positions." His comments come about a year-and-a-half after GE announced it would move its corporate headquarters from suburban Fairfield to technology-rich Boston, which chairman and CEO Jeff Immelt said fit the company's ambitions as an innovation leader.

Hartford Mayor Luke Bronin said "losing Aetna's flag" would be a blow to the state and greater Hartford. The Democrat said the state must now act boldly.

"I think the decision that Aetna seems poised to make, reinforces the argument that we've been making for the better part of a year, which is that if Connecticut wants to remain economically competitive, we have to be a place that has strong and vibrant cities — strong and vibrant metropolitan areas, where companies can attract talent and retain talent," said Bronin, who has pushed for greater regional cooperation to bolster Hartford.

Oz Griebel, president and CEO of the MetroHartford Alliance, a regional business group, acknowledged Aetna is one of the state's most valued employers and the image of the company moving its corporate headquarters elsewhere has a "psychological impact" on the state. But he stressed that major investments have been made in Hartford and other Connecticut cities. Steps are being taken to address the state's fiscal obligations, such as employee retirement costs.

While the state's cities are not as large as a Boston or New York, he said Connecticut continues to have an educated and innovative workforce.

"The asset base here is very strong," Griebel said. "Our job is to promote that asset base."

Susan Winkler, executive director of the Connecticut Insurance and Financial Services Cluster, an association of 32 insurance and financial services industry leaders, said even if Aetna moves its headquarters, Connecticut will remain the insurance capital of the world.

"Connecticut has a rich history of insurance practice," she said. "Our workforce is really second to none. We have the most insurance jobs, the most actuaries. We write the most premiums. We are the insurance capital and that's not going away."

The state also has a healthy pipeline of labor into the insurance and financial services industries from colleges and other sources, Winkler said. At 2.7 percent, Connecticut ranks first nationally in insurance carrier employment as a percentage of total employment. The average wage for nearly 59,000 insurance carrier jobs is more than $83,936, according to 2016 state industry report.

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Associated Press Writers Dave Collins and Pat Eaton-Robb contributed to this report.