Insurer Chubb to open center in Baltimore

As many as 200 expected to work at processing office

November 10, 2005|By JAMIE SMITH HOPKINS | JAMIE SMITH HOPKINS,SUN REPORTER

A large New Jersey insurer will open a policy processing center in Baltimore next fall that will eventually employ as many as 200, a move heralded yesterday by economic development officials as a major win for a city hit by a generation of losses in its financial services base.

Chubb Corp., a property and casualty insurance provider, said yesterday that the office will process commercial insurance policies for East Coast agents and brokers. It isn't closing local branches but wanted to consolidate processing jobs in one place.

"It's a central location, and there's a talented labor pool in the city and surroundings," said Mark Schussel, a company spokesman.

The city lost a string of insurance and bank headquarters in the late 1980s and through the 1990s, but it still has a cluster of financial services operations. State and local leaders are trying to build on that, selling Baltimore as a place for financial companies' high-end back offices.

"This is a way to create ... good jobs that are the sweet spot of our work force," said Aris Melissaratos, the state secretary of business and economic development. "Anything we can do to bring more jobs to the city is, I think, phenomenal."

Baltimore has the state's highest unemployment rate, averaging 7.4 percent this year. Maryland's rate has averaged 4.3 percent.

M.J. "Jay" Brodie, president of Baltimore Development Corp., the city's economic development arm, said the Chubb location "will be in the city, they've told us that." Chubb has not settled on office space and expects to be looking for the next six months.

Neither the state nor the city development agency offered incentives to seal the deal. Melissaratos said small grants for training and building improvements are possible.

Schussel said he doesn't know the salary ranges for the jobs. They should be solidly middle class, Melissaratos said.

Christian S. Johansson, president and chief executive of the Economic Alliance of Greater Baltimore, a public-private partnership that markets the region, said the deal shows the power of a coordinated effort.

The state started trying to land Chubb about two years ago, when Maryland Insurance Commissioner Alfred W. Redmer Jr. heard of the processing center opportunity, Melissaratos said.

Last year, state and local leaders - including Redmer - lobbied Chubb on Baltimore's behalf during a trade mission to New York organized by the economic alliance. Atwood "Woody" Collins III, head of M&T Bank Corp.'s Mid-Atlantic division, called the company to add to the chorus, Johansson said.

"That sends a strong message about how wanted that company is in this region," Johansson said.

"Baltimore City has been losing financial services jobs; Baltimore County has been gaining financial services jobs," said Anirban Basu, head of Sage Policy Group, a Baltimore economic consulting firm. "So it's nice that we see some jobs come from outside the region and land in Baltimore City."

Insurer USF&G Corp. had its headquarters in the city before being bought in 1998 by what is now St. Paul Travelers Cos. Inc. The parent corporation moved the remaining 700 jobs from the city to the county last year.

Other financial services jobs were cut during the spate of acquisitions of local companies in the 1990s, including the investment house Alex. Brown Inc. and Baltimore Bancorp.

"Today we think of ourselves as sort of a second-tier financial services market, and it's likely that we'll be that way forever," Basu said. "But that said, we have this cluster of money managers in Baltimore, we have banks like Provident, Mercantile, First Mariner Bank, and hopefully what Chubb saw in Baltimore, others will see."

jamie.smith.hopkins@baltsun.com

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