German insurance giant Allianz said it will absorb the commercial lines business of its U.S. subsidiary Fireman’s Fund Insurance Co. into one of its own global divisions.
Meanwhile, after days of declining to comment, Allianz has acknowledged it is considering “strategic options” for Fireman’s Fund’s personal lines insurance business. Various media reports suggested that plans are underway to sell the personal lines business, though Allianz and Fireman’s Fund had declined to comment until the Sept. 17 announcement.
Specifically, Fireman’s Fund’s commercial property division will now be integrated into Allianz Global Corporate & Specialty (AGCS), as had been speculated in media coverage over the weekend.
Allianz noted that the move follows similar action in 2009, when it transferred the Fireman’s Fund marine business to AGCS. The action added close to $600 million in annual gross premiums to the division and made it “one of the leading providers of specialty insurance in the U.S.,” Allianz said.
That same idea – creating a larger commercial lines powerhouse – is in play with the absorbing of Fireman’s Fund’s specialty commercial property/casualty business into AGCS. The combined operation will produce more than $3 billion in revenues, based on gross written premiums in 2013, according to the company.
Andrew Torrance, CEO of Fireman’s Fund, put a positive spin on the development.
“This moves gives our commercial P&C business greater direction and focus,” Torrence said in a statement. “AGCS will offer many benefits to Fireman’s Fund’s clients and business partners in the U.S., with its global reach, recognized expertise and AA rated financial strength.”
Torrance took over as president and CEO of Fireman’s Fund in the summer of 2013, succeeding Lori Fouché to become the fifth executive at the helm since 2007.
Axel Theis, the CEO of AGCS, said in a statement that Fireman’s Fund’s commercial P/C business will help his division “focus on opportunities in commercial insurance, operate under the Allianz brand” and build on products AGCS already offers in the U.S.
The Fireman’s Fund commercial P/C business is focused around industry segments including construction, technology, real estate, healthcare, entertainment and professional services, particularly those with domestic exposures across the United States. AGCS, on the other hand, concentrates on large corporations or specialty risks, particularly those with multinational exposures.
There may be a more ominous future, however, for Fireman’s Fund’s personal lines business. Beyond the now-public plans for Fireman’s Funds commercial lines business, Reuters and others initially reported over the weekend that Allianz would sell off Fireman’s Fund’s personal P/C business due to repeated operating losses.
Allianz and Fireman’s Fund initially declined comment on the reported sale plans. Their admission that they’re considering “various options” to “build scale” for Fireman’s Fund’s personal lines business inches closer to that reality, however, and puts the future of the 150-year old Fireman’s Fund as a brand name in question.
Robyn Hahn, Fireman Fund’s chief marketing officer, declined to address specific questions about the future of Fireman’s Fund’s brand, and whether Allianz would sell off its personal lines business.
“At this early stage, we cannot provide more information than is already in the announcement,” she said via email.