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The Backstory on the Fireman's Fund Green Commitment

"You're only a leader if someone else is behind you and following you," said Fireman's Fund President and CEO Michael LaRocco.

"If we can encourage other insurance companies to get into this space, it's going to raise awareness ... it keeps everybody innovating, it keeps everybody on the front edge of this," LaRocco told GreenBiz Senior Writer Marc Gunther in an interview today at the third annual State of Green Business Forum in San Francisco. The event opened this morning, the first of a series of three programs that move to Chicago next week and Washington, D.C., the week following.

In the conversation with Gunther, the head of the company that was the first to write policies for horseless carriages and planes provided a look at the firm's sustainability efforts and the drivers that have placed Fireman's Fund at the top of the list of innovators in green insurance.

Fireman's Fund was the first carrier to widely offer green insurance in the U.S. commercial marketplace. The launch of the special coverage for commercial buildings in 2006 was followed a string of new green products as well as expansions in the initial offering. They include green insurance for manufacturing facilities, homes, commercial and personal autos and, just last year, a 5 percent discount to policyholders with Energy Star buildings and coverage for schools and energy efficiency equipment.

The policies enable owners not only to replace existing green structures, equipment and other property in the event of a covered loss, but also to upgrade those environmentally friendly and energy efficient elements, and to rebuild or buy green if damages or total losses are sustained to traditionally built properties and standard cars. The firm created a Green RiskAdvisor Program to help policyholders determine what steps to consider to make their property safer, greener and less vulnerable to risk.

The company's growing ventures in the green arena are the result of "the strong views in sustainability" held by Fireman's Fund and its corporate parent, Allianz, LaRocco said. "It's also about the passion and pride our employees have around the issue."

In addition to selling green insurance, Fireman's Fund has also made sustainability commitments for its business operations. The firm set a goal of reducing carbon emissions by 25 percent by 2012 (Allianz's goal is to reduce emissions by 20 percent by 2012.) Fireman's work toward its target include attaining LEED certification at three major facilities in Dallas, Novato and St. Louis and the planned installation of six Bloom Energy fuel cell boxes at its headquarters in Novato.


[Editor's Note: Revisions made to this page on February 3, 2011.]

For a company that took its name from its 19th century practice of donating 10 percent of its profits to the widows and orphans of volunteer firefighters, the move to green product offerings and business operations in the 21st century seems like a natural progression.

Like concern for the community, concern for the environment is an expectation -- especially among employees, LaRocco said. Increasingly, corporate environmental responsibility is a differentiator for people entering the jobmarket and considering employers, and for consumers, he noted.

In response to a question from Gunther, LaRocco estimated that green commercial insurance currently represents just under 5 percent of the company's business in the market. "While the numbers are small today, we're confident that it's going to be a growing part of our business."

To those who might be dubious about the strength of connections between green offerings and the insurance business and about returns on investments for greening operations, LaRocco offered further thoughts.

"If you do look at global warming and the risk of an increase in severe of storms, insurance companies are the first responders," he said. "This is something that is very important to us as individuals and members of society (and) as a business it is absolutely essential ... It is a really straight and direct decision to get into this space and is the reality of our business."

As to the challenges of requirements for tight paybacks on efficiency and sustainability investments, LaRocco said, "There is no question that it takes strong leadership in that you've got to be able to look at it on a long-term basis."

Data from building owners shows that green buildings have higher occupancy rates, less turnover, lower costs for operations and maintenance, and higher building values, he said. Green buildings and facilities also give companies an edge in attracting top talent. All of which equates to buildings are more efficient and cost effective for owners and pose less risk to the firms that ensure them, LaRocco said.

The best way to address climate change is for businesses to take the initiative, rather than wait for a legislative or regulatory remedy, he said.

"Businesses tend to wait and wait and wait," LaRocco said. "It's really frustrating to me that we haven't made the right type of progress ... you really have to have a long-term vision. These are the types of investment that have long-term benefits for the future."

The full video of the interview is available online from

Top photo by Goodwin Ogbuehi, Inset rendering courtesy of Fireman's Fund.

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