Under the radar, XL Insurance continues to grow its Hartford presence
November 27, 2006
By CHRISTINA H. DAVIS, Hartford Business Journal Writer
Despite what the name implies, XL is not a maker of oversized apparel.
And even though the company has more than 220 employees in downtown Hartford, John Sullivan, chief information officer for XL, still has to tell people he meets that the company he works for “does not sell undershirts.”
What XL does sell is high-priced insurance policies, offering global insurance, reinsurance and financial products and services. It is more properly known as XL Capital Ltd., which was founded 20 years ago in Bermuda — separated only by a small sidewalk from its major competitor, Ace Ltd. XL was created by 68 global corporations in response to a severe shortage of liability insurance in the United States. Since then, the company has expanded to include 3,500 employees worldwide and total revenues of $11.3 billion.
A subsidiary of XL Capital, XL Insurance is based in Hartford, where a staff of about 75 runs the company’s global professional liability business. Overseeing those policies, is John Glancy, chief underwriting officer for XL Insurance.
In addition to the professional liability staff, XL Insurance also has its IT headquarters in Hartford, headed by Sullivan, who oversees 98 staff members locally.
Including staff from a smattering of other divisions — including reinsurance — and about 35 consultants, XL employees in Hartford number 224.
That’s a far cry from five years ago when Sullivan joined the company. At that time, there were less than 35 XL employees in the Hartford area, he said. Initially, XL had small offices throughout the Hartford region, but consolidated at 100 Constitution Plaza in downtown Hartford in 2001. Since that time, the company has quietly gobbled up space at the building, where it now occupies the top four floors, and has plans to occupy a fifth, according to Glancy.
XL also has offices for its reinsurance business in Stamford, where its employment has grown from 250 to 400 in the last five years.
While XL might be nothing more than a two-letter logo on the outside of 100 Constitution Plaza to many drivers in downtown Hartford, those in the insurance world are well aware of XL’s growth, according to Glancy.
“High-end insurance professionals know exactly who we are and actually keep a pretty close eye on us,” he said.
And so does Barbara Fernandez, head of the state’s Insurance and Financial Services Business Development Office, which is within the state Department of Economic and Community Development.
Fernandez describes XL as “one of the truly, truly global organizations that we have in Connecticut.”
However, she added XL “is not a flashy company.”
Glancy agreed, saying that XL does not appear daily in the Wall Street Journal, but that it’s “focused on doing business and making money.”
So far this year, the company’s been successful in that mission. In its third-quarter earnings release, XL Capital reported a $415.8 million profit, up from a $1 billion loss reported during the same quarter of 2005, when it had to pay out big bucks because of the hurricane season.
While the company as a whole is enjoying better results, thanks in part to a calm hurricane season, Glancy said its professional liability business has grown from $150 million in revenues in 2001 to being on track to reach the $900 million mark by the end of this year.
“The biggest reason for our growth is the expansion of product lines, whether through acquisition or through organic growth of individual businesses,” Glancy said.
Part of the reason why XL has established, maintained and grown a presence in Hartford is because of the local talent, according to Glancy.
“There is a strong pool of people here with insurance specific skills,” he said.
In addition, Fernandez said cost plays a big factor in XL’s expansion in Hartford.
“We’re cheap,” she said. While that may sound shocking to some local business owners, Fernandez said prices in Hartford are dramatically lower when compared to other international XL locations.
Glancy agreed. “I can assure you that the rent in London and Paris is significantly higher than what we’re paying in Hartford,” he said.
XL’s growth in Hartford is in sharp contrast to the consistent loss of insurance jobs in the Hartford region. Recently, the health insurer Aetna — which continues to report consistent profits — announced it would be laying off 600 employees nationwide, 280 of which will be in Connecticut.
But one company’s loss can be another’s gain, according to Fernandez.
“XL loves layoffs,” she said, explaining that cutbacks at the area’s bigger insurers offer XL an available pool of experienced talent.