Connecticut Counting The Potential Cost Of Aetna's Move

Jun 1, 2017

Economic development officials must grapple in coming months with the implications, should one of the state’s most iconic companies decide to move its headquarters out of Connecticut. 

As Aetna confirms it is in talks to leave, the comparisons with General Electric are unmistakable; that company recently moved its top executives out of Connecticut, heading to Boston after 40 years in the state. GE did leave a significant workforce, mostly in Norwalk at GE Capital. Aetna also said it is committed to its Hartford campus and will retain employment here.

But economist Don Klepper Smith said that losing the highest paid positions still has a marked effect.

"For every job lost in the insurance sector, there are another 2.3 jobs lost elsewhere in the local economy," he told WNPR. "For every dollar spent within the insurance sector, there’s another $1.63 generated in incremental spending. And this comes at a time where the fiscal problems in Hartford are pronounced, so it really puts the City of Hartford behind the eight ball."

Klepper Smith pointed to the depressing effect on the housing and job markets, and on philanthropic giving in Fairfield County, as a consequence of the GE move.

The loss of such national names also creates an image problem.

Where Connecticut was once seen as a haven for headquarters -- cheaper than Manhattan but with all the right connections to the financial sector -- now the Nutmeg State could begin to be labeled a backwater.

But Oz Griebel, of the MetroHartford Alliance, said he believes Hartford can still call itself the Insurance Capital of the World.

"On a percentage of per capita, the number of insurance jobs that are here, I'd say absolutely -- the R&D effort that’s here,” he said. “I mean, insurance because of technology is undergoing significant change, and how insurance is done and what particular roles an insurance company plays is always going to be changing. But yes, I think there is still a very healthy, strong, and vibrant component of the industry.”

Legislators crafting a state budget, meanwhile, must now factor this very pointed criticism of the state’s business climate into their calculations.

Asked Thursday about the Aetna announcement, House Speaker Joe Aresimowicz blamed a lack of vision.

"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," he said. "The business community, they want to know what the plan is."

Aresimowicz promised measures in the budget to improve economic development in cities.

He and Majority Leader Matt Ritter both pointed to the example of Travelers as what they hope will form a model for Aetna. Travelers’ headquarters left the state in the 1990s, but the company continues to be a major employer in Hartford.