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Indiana Gets Aggressive

New initiatives, aggressive incentives, and a revamped Web site work to bring in business.

By Karim Khan

A new set of initiatives aimed at developing Indiana’s insurance industry was unveiled last year, coinciding with the appointment of former insurance industry advocate Mike Chrysler as the Indiana Economic Development Corporation’s (IEDC) Director of Insurance Initiatives. There are more than 60,000 people in Indiana working in the insurance industry, and 1,700 licensed insurance carriers.

The Indiana Department of Commerce says the state’s tax, judicial, and legislative climate offers efficiency and consistency to the insurance industry. Indiana’s 1.3% insurance premium tax is among the lowest in the nation. (The tax is flat across all types of insurance.) Indiana companies are also offered a domestic preference to pay either premium taxes or the corporate income tax. Two state universities, Ball State and Indiana State University, offer undergraduate insurance degrees, providing a source of talent for the industry.

The initiatives unveiled include:

  • Working with insurance companies headquartered in Indiana or that otherwise have a physical presence in the state to encourage their growth and ensure that their needs are being met;
  • Marketing Indiana’s advantages to the insurance industry in order to attract new companies to the state;
  • Identifying and encouraging regulatory and legislative actions that support a competitive insurance marketplace in Indiana; and
  • Providing economic incentives that have not previously been made available to the industry.

“We are focused on restoring Indiana’s status as the premier location for insurance headquarters,” says Chrysler. “Indiana has an ideal business climate for insurance companies, and the IEDC’s initiative will target that message to the industry.”

The Department of Commerce’s claims that the judicial climate is advantageous in Indiana is backed up by the state’s Tort Reform Act of 1995, which emphasizes personal responsibility. Key elements include applying comparative fault, rather than strict liability to product liability cases dealing with defective design or failure to warn; restricting the awarding of punitive damages; and allowing any person who caused or contributed to an injury to be named as a non-party. The state also markets its favorable demutualization laws, which provide a clean process for converting mutual companies into stock companies and avoid depleting the converting company’s cash and surplus.

Indiana also benefits by having a strong pipeline of potential employees joining the over 60,000 insurance workers in the state; Indiana State University was recognized by Business Insurance magazine as one of the three schools nationally to offer undergraduate courses that expose students to all aspects of property/casualty and life/health insurance, as well as risk management techniques and concepts. Insurance training is also being introduced at the high school level in cooperation with InVEST (Indiana’s Internet public funds bidding system for financial institutions) to educate teenagers about insurance, encourage their interest in considering insurance as an occupation, and to generate additional interest in the Indiana State University and Ball State University insurance major programs.

New GIS System Online

IEDC started off the New Year by launching a Web site powered by geographic information systems (GIS). The site and building database, online at www.IEDC.in.gov, makes Indiana the fourth state in the nation with a Web site that utilizes interactive GIS mapping technology for statewide site and building searches. (Many communities have similar offerings on a local or regional scale.)

The site selection tool is part of the IEDC’s redesigned Web site. IEDC is partnering with the Indiana Economic Development Association (IEDA) and the Indiana Business Research Center (IBRC) to keep the site content accurate.

“The site and building database provides immediate access to critical business development information needed to facilitate economic growth in Indiana,” says Mickey Maurer, Indiana’s incoming Secretary of Commerce and chief executive of the IEDC. “Geographic information systems are playing an increasingly integral role in the world of economic development and corporate real estate, and this tool will answer the main questions that businesses have when they are involved in the site selection process.”

You can use the site to locate properties that meet your requirements in terms of size, features, and demographic and economic characteristics of the surrounding area. Maps and reports from across the state can be tailored to your needs.

The database currently holds site and building information from two Indiana utilities—Northern Indiana Public Service Company (NIPSCO) and Cinergy/PSI—but will soon be populated directly by local economic developers throughout Indiana. The Web site will focus on industrial and large commercial sites and buildings. Economic developers around the state are beginning to receive training on how to add their available sites and facilities to the database.

Out-of-State Companies Move In

Last year, two high-tech companies announced major expansions into Indiana. NSK Precision America—a manufacturer of bearings and precision motion products used in everything from medical and biotech to food processing and aerospace—is moving its headquarters from Addison, IL to a site in Franklin, IN where it previously only performed manufacturing and employed 100 people. Although the movement of the corporate headquarters only brought about 20 jobs—most of them transfers—it is expected to help meet a soaring demand for NSK products, indicating future expansions are likely. NSK already had other manufacturing operations in Indiana besides the Franklin site. The capital investment for moving the headquarters was estimated at $1 million.

“The commitment and leadership by the city of Franklin, the county’s commitment for growth, and the state’s aggressive stance toward attracting corporate headquarters were all major contributing factors that led us to select Franklin as the site for our corporate headquarters,” says Gus Kontonickas, president of NSK Precision America, Inc. Franklin reportedly beat out communities in Michigan and Ohio, among other Midwestern states.

The incentives package offered seems to imply further growth in manufacturing. IEDC, in partnership with the city of Franklin and Johnson County, worked together to offer NSK $300,000 in training grants from the Skills Enhancement Fund (SEF) to train Indiana resident employees; up to $50,000 in training grants for technology professionals through the Technology Enhancement Certifications for Hoosiers (TECH) fund; up to $100,000 in off-site infrastructure improvements needed to serve the site through the Industrial Development Grant Fund; and local tax abatements.

More recently, NEMCOMED Inc., a medical device design and manufacturing company, announced plans to construct a new manufacturing, engineering, and research and development facility in Fort Wayne, IN. It will create up to 160 new jobs in the process, complementing the other NEMCOMED campus in Hicksville, OH. The 34,000-square-foot Fort Wayne structure will be built on approximately seven acres in the North Clinton Business Park adjacent to Interstate 69, and will be completed this August. The company plans to build an additional 20,000 square feet in 2009.

Approximately $56,000 in training grants from the SEF to train Indiana resident employees were part of the incentives packages offered to NEMCOMED. The company was also offered up to $50,000 in training grants through the TECH fund. Up to $1.6 million over 10 years in Economic Development for a Growing Economy tax credits (EDGE) and potential tax credits for certain company investments through the Hoosier Business Investment (HBI) tax credit program are available as well.

Indiana Fast Facts

  • Population (2005): 6,271,973
  • Largest Cities (2004): Indianapolis, 784,242; Fort Wayne, 219,351; Evansville, 117,156; South Bend, 105,494; Gary, 99,516
  • Targeted Industries: Advanced manufacturing, agriculture, information technology, insurance, life sciences, logistics
  • Key Incentives: Economic Development for a Growing Economy (EDGE) program, Certified Technology Parks program, Hoosier Business Investment Tax Credit (HBITC) program, 21st Century Research and Technology Fund, Industrial Recovery Tax Credit

Civilian labor pool: 3,231,400
Unemployment rate: 5.5%

Source: Bureau of Labor Statistics, Dec. 2005

 

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