Fireman’s Fund Ready to Rally

Fireman’s Fund’s financials, like other insurance carriers’, got bruised in the first half of 2010. In particular, the Novato, Calif.-based insurer had significant claims due to heavy flooding and wind damage in the Midwest and East.

But President and CEO Mike LaRocco says he’s “very bullish” about the company’s future. In particular, he believes the independent insurance agency distribution system and technology will give his company a leading edge in the U.S. property/casualty insurance industry.

Despite the bruising by Mother Nature, LaRocco said he sees sunnier days ahead. “It’s hard to make a prediction but I think we’ve hit the bottom and we’re going to start coming into a better place,” he said, with the caveat that “so much of it depends on the overall economy.”

Technology a Trump Card

LaRocco says the insurer is focusing on technology, where he readily admits the company has been weak, operating like several other insurance carriers with “old legacy systems.” In January 2009, parent company Allianz invested $100 million into the company, largely to upgrade the company’s infrastructure, technology and products, and make it easier for agents and brokers to do business with the carrier.

“The insurance industry has always been under-invested in technology. We were bad as well,” LaRocco said. “So we’re trying to fix that old legacy system and update those things, and that’s really kind of the day-to-day processing of work.”

Meanwhile, the insurance carrier is trying to leverage social media to reach consumers who want more flexible options in reaching their financial advisors. “Social media is interesting in that you can leverage Twitter, you can leverage Facebook, you can do an iPhone application. And the neat thing is that you can do some of that outside of your old, lousy technology,” he said. “We are going to fix that going in this path, but there’s a whole bunch of stuff you can do that’s not really connected to your old technology. Even though we’re trying to catch [the competition] over here, over here, we can play in that space right now.”

Fireman’s Fund has been promoting the company on Facebook, Twitter and through blogging. The company also has services to help its independent agency partners build their Web sites, as well as provide streaming content to agents’ sites.

“I’m fanatic about the fact that independent agents have a real opportunity through social media to become even more important in the distribution channel,” LaRocco said. “I think it’s going to lead us to a lot of wonderful opportunity going forward.”

In the relationship between insurance carriers and agents, if both sides can become more effective in using technology, it’s going to become a more efficient relationship, LaRocco added. “We’re clearly locked with independent agents; we believe that it’s the best way for customers to buy insurance. If we can help independent agents become more effective through the use of technology like social media or their own Web sites, then I think that makes us jointly successful.”

To Market, To Market

Fireman’s Fund also hopes to grow by increasing its product offerings. The company continues to expand its green insurance offerings. Additionally, LaRocco said the company continues to move forward with its mass market strategy. In June 2009, the company announced it would be creating personal insurance products for home coverage, auto coverage, incidental coverages and umbrella coverages, that “average Americans” need. The auto product has launched in 11 states, with “mixed results,” but continues to make progress, according to the president/CEO.

“It’s not going as quickly as we would like, but we had said all along that as we enter into automobile insurance and middle-market home and small-business commercial, that we want to do it the right way,” LaRocco said. “You can’t put a product in the marketplace without the right technological platform, because agents want to have an efficient way to issue that business. It’s a very profitable business, but it’s a low-margin business, so you’ve got to be able to deal with those products efficiently. So we’re building that technology, and it just takes time.”

Ultimately, Fireman’s Fund aims to be an even bigger national carrier than it already is. While it is known for its high net worth and affluent products in personal lines and niches such as entertainment in commercial lines, the company has a larger geographic footprint than many people perceive, despite its California roots. It aims to take those steps even further.

“We are very bullish on our future,” LaRocco said. “Right now, we are a fairly small player in the United States property/casualty industry. But we’ve got very specific plans to become a significant player in this marketplace.”