Bermuda-based Arch Capital Group Ltd. announced it reached an agreement in principle to acquire Tri-City Brokerage, Inc. from Ullico Inc.

Tri-City is one of the largest independent brokers of specialised, wholesale insurance products and services in the United States.

In 2000, Tri-City produced over $300 million in premiums in a variety of product lines, including casualty, property, financial services, programme business and specialty products.

Tri-City, which is led by John Hahn, its Chief Executive Officer, operates from offices located in Chicago, Long Island, Los Angeles, New York and San Francisco.

The transaction is subject to the completion of the company's due diligence examination of Tri-City and the negotiation and completion of definitive documents, which will include standard closing conditions.

The acquisition of Tri-City will broaden the products and services currently offered to the retail brokerage segment of the insurance marketplace by Arch Insurance Services, a division of the Arch Capital Group.

Arch Insurance Services provides a range of risk transfer, merchant banking and capital-related services to entities engaged in insurance distribution, including: underwriting capacity, insurance programme design and management, rent-a-captive facilities and captive management for programmes, retail agents, associations, and affinity groups, merchant banking and capital-related services such as mergers and acquisitions and capital raising advice and private equity investing.

Peter Appel, President and CEO of Arch Capital, said, "The acquisition of Tri-City provides the Arch Capital Group with a national presence as a wholesale insurance provider and significantly expands the services offered by and the client base of Arch Insurance Services. We also believe that Tri-City is well-positioned for growth in the current market environment."|

John Hahn, President and CEO of Tri-City, said, "The Arch Capital Group is a great fit for Tri-City. As part of Arch Insurance Services, we can increase the products and services offered to our existing and prospective clients, while the resources of Arch Capital will strengthen our ability to capitalise on improving conditions in the insurance marketplace."

Arch Capital Group Ltd. is a Bermuda-based, diversified financial services company with over $500 million in assets.