Hartford Business Journal

4 Hartford Business Journal • January 15, 2018 • www.HartfordBusiness.com Briefs The Hartford takes early tax reform hit, expecting long-term gains Federal tax reform will hit property and casualty insurer The Hartford hard initially, the company said, with an estimated $850 million fourth-quarter loss, though the long-term economic impact appears favorable. The insurer, which is based in Hartford and does not officially release its earnings until Feb. 8, also noted it expects a $117 million after-tax loss from catastrophe claims, which were primarily due to California's wildfires. The approximately $850 million charge from the new U.S. tax law is mainly due to the reduction in the U.S. corporate tax rate from 35 percent to 21 percent and its corresponding impact on the company's net deferred tax assets, which are past financial losses that can be used to offset future tax liability, the insurer said. According to a spokesman, the resulting value of those deferred tax assets will decrease because the tax rate has gone down. "Although the new U.S. tax law reduces the company's net deferred tax asset position, the company expects a net favorable future economic impact from both the lower corporate income tax rate and the repeal and refunding of the corporate alternative minimum tax credits," the insurer said. The long-term benefits of the tax law are what prompted the company to hand out one-time $1,000 bonuses to about 9,500 workers who make less than $75,000 a year, the spokesman said. However the bonuses themselves are unrelated to the estimated $850 million charge, he said. Report: NYC officials pull plug on Aetna relocation incentives New York City officials have pulled the plug on a $9.6 million incentive package to health insurer Aetna, which pledged to move its headquarters from Hartford to Manhattan, according to Crain's New York. The de Blasio administration nixed the incentive deal because Aetna is not moving forward with the relocation, Crain's reports. The news comes on the heels of Aetna's recent agreement to be acquired by Rhode Island-based CVS Health for $69 billion, a deal that put into question Aetna's relocation plans. In a written statement to HBJ, an Aetna spokesman declined to comment on the published report other than to say all of the company's locations will be evaluated as part of the integration planning process with CVS. "We have nothing additional to share at this time," the spokesman said. According to Crain's, Aetna was offered a $35 million incentive package from New York City and state officials in exchange for moving its headquarters to Manhattan and occupying 145,000 square feet at 61 Ninth Ave. Aetna had said it planned to move over 200 senior executives to New York City in order to tap into a larger tech talent pool. B of A names Gianni Hartford region chief Joe Gianni, a veteran Connecticut banker who began his career with a downtown Hartford lender, is the new Hartford market president for Bank of America. Gianni, 57, of West Hartford, on Jan. 1 succeeded Kevin Cunningham, who after a decade as market president, was named B of A's global commercial bank credit executive for specialized industries and Canada. Charlotte, N.C.-based B of A is the nation's No. 2 bank by assets, and is Connecticut's No. 1 bank by total deposits. CEO Brian Moynihan said that, as Hartford market president, Gianni leads its banking and investment teams, and oversees the bank's community engagement. B of A counts 43 branches and 77 ATM locations in its Hartford region. Gianni also sits on the bank's government-relations team, which will put him in contact with local, state and federal lawmakers on public- policy matters. Gianni previously was the bank's Northeast region executive, overseeing local-market activity throughout the region. His office is in CityPlace I in downtown Hartford. "I'm just thrilled to be in this role,'' Gianni told the Hartford Business Journal in an interview, "and to represent Bank of America out in the community … to continue all the good work we've done in the past.'' Hartford development chief quits amid questions about city residency Sean Fitzpatrick, Hartford's director of development services, resigned Jan. 9, effective Jan. 31, amid concerns about whether he is in compliance with the city's residency rules. Fitzpatrick said in an email to his department obtained by Hartford Business Journal and other media outlets that he is Week in Review TOP STORY Malloy: CT's $4.3B roadwork on hold T he governor says Connecticut is postponing indefinitely $4.3 billion worth of transportation projects until lawmakers come up with new revenue to pay for them. Gov. Dannel P. Malloy and Department of Transportation (DOT) Commissioner James P. Redeker released the full list of projects Jan.10 that are dependent on funding from DOT's Special Transportation Fund (STF). Malloy says his administration will announce detailed proposals this month that, if adopted by the General Assembly, would bring the projects back online. In addition, Malloy has hinted that the state will need to increase bus and rail fares. The STF finances the state's transportation system, including the operating costs of the CTDOT and all of the services it provides. Last month, Malloy reiterated and increased his warnings on the solvency of the fund following the release of a report showing that without prompt action, the STF will be in deficit by fiscal year 2019, which begins July 1. Critical improvements to the I-91/Route 15 interchange on the Charter Oak Bridge, the replacement of the Waterbury Mixmaster, and the widening of I-95 from Bridgeport to Stamford, are postponed until resources are identified to allow projects to continue, state officials said. Other postponed projects include some $11 million for design and right of way for the Hartford rail line as well as nearly $400 million for future construction of it; $3 million in 2018 and 2019 for Union Station improvements and more than $550 million for rail fleets. Postponements also include the scheduled removal of traffic signals on Route 9 and a variety of road reconstruction and trail improvements and connections. BY THE NUMBERS 114,134 The number of Connecticut residents who signed up for health insurance through the state's insurance ex- change, Access Health CT, during the recently ended open enrollment period, which was a 2.3 percent increase from a year ago. 10% The proposed increase in Connecticut rail fares coming this July to make up for a shortfall in the state's transporta- tion fund. $850M The approximate charge insurer The Hartford will take in the fourth quarter due to a short-term hit from the new federal tax law. $110,045 The amount of money Hartford Mayor Luke Bronin has raised so far for his potential gubernatorial run. TOP 5 MOST READ On HartfordBusiness.com • 1. CT sees $900M in early income-tax receipts • 2. B of A names Gianni Hartford region chief • 3. Hartford development chief leaves amid questions about city residency • 4. Bronin seeks favorable tax status for 37 Hartford neighborhoods • 5. Riverfront Recapture launches Riverfront Innovation Fund STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on Linkedln: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/ subscribe Weekly e-newsletters: CT Green Guide Weekly, CT Health Care Weekly www.HartfordBusiness.com/ subscribe Future investment in the Hartford rail line (Berlin station shown here), which is set to debut this spring, will be put on hold due to a shortage of transportation funds. PHOTO | HBJ FILE Joe Gianni, President, Hartford market, Bank of America

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