BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
Tom Lawson is president and CEO of FM Global, having taken the reins of the insurer in 2014 after a career that began when he joined the firm in 1979. He recently spoke with Business Insurance Associate Editor Matthew Lerner about the company, its clients and changes in the industry. Edited excerpts follow.
Q: As one of the largest reinsurance clients in the world, how do you see reinsurance markets heading into Jan. 1 renewals?
A: Our largest catastrophe treaty expires July 1, so we don't have any Jan. 1 renewals. However ... our July renewal was about flat, though there were increases in our exposures due to the fact that our client base grew. We added in some enhancements, primarily additions to catastrophe treaties. Overall, our renewal rounded out about the same.
I think the perception is that rates are near the bottom.
Q: Attracting new talent to the industry can be a challenge. What is FM Global doing?
A: We hire predominantly through our engineering group. Of our 5,300 employees, 1,800 are practicing engineers and another 1,800 were former engineers like myself. That's where we got our start. So two-thirds of the company has that engineering background.
The bulk of our recruiting is right out of universities through the engineering group. Within our corporate headquarters, we do a lot of hiring for finance, marketing, legal, HR, those types of functions, but our engineering pool really is what feeds the bulk of our company, particularly in the operations or the staff groups like engineering and underwriting and sales. Therefore, most of our salespeople, our adjusters, our underwriters, our account managers are typically folks who started as engineers.
Q: What are clients saying and asking for in today's market?
A: Cyber is a significant issue for our clients. As a first-party property carrier, we look at it through a focused lens. Initially, we didn't call it “cyber” in our policy; it was called “e-commerce.” That was in 2003, and it was really focused on two areas.
We looked at a client's data as property, so damage to that property was similar to damage to your building. If someone damaged your data, corrupted it, just like a tornado blew your roof off, we would pay to put the data back where it was just like we put your roof back on. So we looked at data as property and damage to it as physical damage.
We also, though, moved past the physical damage and introduced coverage for denial-of-service attacks. For example, if someone introduced a virus or malware into your system that shut down your reservations system or shut down your ability to take magazine subscriptions even though there was no physical damage, it's covered under this coverage, which we've had for the past 12 years.
Today it's big headlines. Boards are asking their C-suites, “What are you doing about cyber?” So it's become a very topical issue.
Now, we're evolving that cover. We're also looking at the loss prevention aspect because our clients look to us not just for capacity but for the ability to help them quantify their exposures and prevent the loss.
We're looking at opportunities to do that, and that will be coming in the next year.
Q: Is technology transforming the insurance industry?
A: To have data and analytics is only one piece of the pie. You have to make sure you validate those analytics with real, hard facts. We've done fire modeling, for example, for decades, but we still do full-scale fire tests because we want to make sure that the models and the science are solid.
It's really this combination of analytics and practical experience that allows us to leverage technology for the benefit of our clients.
Sean Duffy is the co-founder and CEO of Omada Health Inc., a San Francisco-based health and wellness provider specializing in technology-based chronic disease management and digital therapeutics. He recently spoke with Business Insurance Associate Editor Matt Dunning about ways employers can more effectively leverage technology to manage — if not prevent — diabetes, cardiovascular disease and other costly chronic conditions among their employees. Edited excerpts follow.