By Lauren K. Ohnesorge Senior Staff Writer, Triangle Business Journal
An insurance company has picked Wake County over Atlanta for a new division headquarters.
Insurance giant Arch Capital Services is consolidating operations into Wake County, a move that means 365 jobs in exchange for a grant worth $6.8 million.
That total includes $1.7 million targeted to the state’s utility fund, which finances rural infrastructure projects.
According to the grant terms voted on Tuesday by the Economic Incentives Committee, the company will get $584,000 in community college support.
Wake County and Raleigh are offering their own incentives packages, worth nearly $139,000 and $187,000, respectively.
The company, according to state economists, has a net benefit to North Carolina of $3.8 million.
Arch, which would be required to retain the more than 70 people it already employs in the state, would pay average salaries topping $109,191 and invest $12.9 million in the operation. Arch company primarily has operations in New Jersey and New York, according to the N.C. Department of Commerce.
“It’s not a headquarters operation, but it is a consolidation of a bunch of services they have in the Northeast,” says Commerce spokeswoman Hannah Harrill. The operation, referred to by the company as a “hub” deals with insurance, reinsurance and corporate functions, she says.
Right now, those segments operate primarily from locations in Jersey City and Morristown, New Jersey, as well as White Plains, New York.
Arch, according to the executive project summary provided by Commerce, believes “consolidating locations is one prong of Arch’s broader focus on operational efficiency.”
“Co-locating the employees at the project site, which will include a diverse workforce of insurance, corporate, and IT professionals, will be instrumental in Arch successfully capitalizing on profitable underwriting opportunities in a highly competitive marketplace,” the summary states.
The minimum number of jobs required to be created in order to fulfill its incentives contract is 329 – but there are caveats.
In addition to hiring, the firm will be required to maintain the 72 positions it already has in the state. In addition to those employees, however, Arch has 492 employees in its US Mortgage Insurance Operations. As that unit is not a party to the grant, maintaining that headcount is not part of the retention agreement.
According the summary, requiring the retention of that unit “would cause the project to locate elsewhere.”
In selecting Raleigh over Atlanta, Arch worked with CBRE Consulting, conducting an in-depth location analysis, one that included “air accessibility,” business environment, demographics, taxes, incentives and even “natural disaster risk.”
Of the $12.9 million the firm is investing in the project, $8.5 million is in property construction and improvements and $4.4 million in personal property. And, in order to get grant money, the company will have to invest a minimum of $11.6 million.
Arch Capital Services includes Arch Capital Group Inc., Arch Reinsurance Company Inc., Arch Re Facultative Underwriters Inc. and Arch Insurance Group Inc.
Arch trades on the Nasdaq under ACGL. Stock was trading flat at $29.01 Tuesday when the announcement was made.
Read the article here.