Chicago Tower Tussels: Willis Tower vs. Aon Center vs. Carriers
By CYRIL TUOHY, managing editor of Risk & Insurance®
You can already picture it: Joseph Plumeri, CEO of London-based Willis Group Ltd., looking out from the observation deck of the Willis Tower more than 100 floors above the street, in his newly branded skyscraper, the tallest building in the Western Hemisphere.
Not bad for a man from hardscrabble Trenton, N.J., a city which up until a few years ago didn't even have a decent hotel.
Sweeping his glance eastward across the skyline out toward Lake Michigan less than a mile away, Plumeri pauses for a brief minute, casting his eyes downward, ever so slightly, at the 83-story high white granite structure that is the Aon Center.
Once the former headquarters of Amoco, and before that the Standard Oil Co., the iconic tower is now the workplace of Greg Case, CEO of Aon. Case and his well-oiled growth machine fed by a pipeline of polished McKinsey alumni have, depending on which metrics you follow, vaulted the company into the world's No. 1 insurance brokerage spot.
Willis is still a distant No. 3 in terms of 2008 brokerage revenue, with $2.8 billion, behind Marsh with $5.4 billion and Aon with $6.2 billion, according to a May report issued by Bernstein Research.
Yet, in many ways Willis under Plumeri has made the greatest strides in the past few years, particularly last year with its $2.1 billion acquisition of Hilb, Rogal & Hobbs. The transaction was one of the largest insurance brokerage deals of the decade.
Plumeri, a former retail broker with plenty of street smarts and charisma, has earned bragging rights--to an extent.
Down by the elevated subway in Chicago's central Loop district, hundreds of feet below where Plumeri and Case toil, it's doubtful most Chicagoans with day jobs even know what Willis does.
Most have certainly never heard of Joseph Plumeri, nor are they impressed with the tower's new name. In fact, news reports quoted no shortage of Chicagoans objecting to the sudden renaming of the Sears Tower--their Sears Tower--which carried the name of the ubiquitous retailer ever since 1973, when it punctured the skyline as what was then the world's tallest building.
The renaming effort has spawned a Facebook group called Chicagoans Against Willis Tower and a Web site called ItsTheSearsTower.com, according to the Chicago Tribune.
A poll that garnered 15,175 responses conducted by the newspaper also found that 95 percent of respondents favored keeping the old name.
"They can call it whatever they want, even 'The Big Willie,' " said Plumeri, who was quoted in an article distributed by the Chicago Tribune. "All I know is that the day we announced that this building would be named Willis Tower, everybody in America knew who Willis was."
During a July dedication ceremony, Plumeri said 500 Willis associates now scattered around Chicago would move by the end of the summer into the 140,000 square feet of space now leased by the brokerage.
Another 200 associates are expected to join them over the next few years as Willis continues to grow, according to the 66-year-old Plumeri, who has said he has no plans to retire.
Speaking in prepared remarks during the July dedication ceremony, Plumeri said the naming of Willis Tower was "an affirmation of our strong commitment to the great city of Chicago, its people and its future."
"Willis has been in Chicago since 1885, the same year that William LeBaron Jenney built the Home Insurance Building, the first skyscraper in the world," he said. "Over the years, we've grown as Chicago has grown, and we are delighted to be a part of the great future this dynamic city is building as a global financial center. We're proud to call Chicago our home."
Aon, with about 2,500 employees working in Chicago, is the real hometown broker, occupying the beautiful and elegant "Big Stan," the former headquarters of Standard Oil Corp. on East Randoph St. The modern-day 83-floor obelisk, opened in 1973, rises 1,136 feet into the sky.
Aon and Willis have done a good job looking out for themselves and piercing the canopy formed by Chicago's highest buildings.
Will Arthur J. Gallagher & Co., the fifth largest broker ranked by global revenues, a nick behind Wells Fargo Insurance Services Inc., stake a claim to a Windy City landmark and deliver a broker hat trick on the city's most recognizable buildings?
Gallagher is already happily ensconced in a 25-story building, known as the Gallagher Centre in the Chicago suburb of Itasca, Ill. For the moment, it has no plans to move from its 2 Pierce Place location, according to Linda J. Collins, vice president of corporate communications.
Wells Fargo Insurance Services Inc., which also has a presence in downtown Chicago, at 150 North Michigan Ave., has for the moment too small a presence to stake a claim on one of the Windy City's many high rises.
An acquisition here or there, however, as Wells Insurance did last year with Wachovia's insurance unit, could suddenly see Wells' insurance numbers jump by order of magnitude, which could then justify big-dollar outlays on naming rights to a building.
... a building like the Wells Street Tower, for example, an elegant glass-walled condominium at 701 South Wells Street seven blocks from the center.
What about the carriers? It turns out they've got their names on landmark buildings as well.
The John Hancock Tower, affectionately known as "Big John," was once the second-tallest building in the city. Located on North Michigan Ave., it remains a destination mecca for tourists trolling up and down Chicago's Gold Coast and was named for John Hancock Financial Services.
Built in 1969, the Hancock tower rises 1,127 feet, and was finished well before the completion four years later of what was then called the Sears Tower, 110 stories high and rising 1,451 feet.
Topping out at 100 stories, Big John hasn't gotten any bigger, just older, and John Hancock Financial was itself renamed Manulife/John Hancock, in the wake of the 2004 merger with the Canadian life insurer Manulife Financial.
There are no plans to rename the John Hancock Center, according to the Lake County News-Sun, citing Golub & Co., the managing partner for the group that owns Big John's commercial space.
As John Hancock continues carrying the flag for the underwriting community, Chicago doesn't lack for other brand-name carriers.
CNA, the seventh largest commercial carrier in America, churns out property-casualty products from its signature red steel building on South Wabash Ave., under the shadow of the Willis Tower.
Zurich North America, the other major commercial property-casualty carrier located in the Chicago area, prefers the office parks of Schaumburg, Ill., the Windy City's well-heeled suburb to the northwest.
All of which leaves the insurance industry's dominance of Chicago's superskyscraper profile vulnerable ? to none other than real estate developer Donald Trump. Last year, his 96-story Trump International Hotel & Tower opened for business.
Located on North Wabash Ave., on the north side of the Chicago River, the building vaulted to the No. 2 spot at 1,362 feet.
September 1, 2009
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