The New Masters of Risk? How insurers are testing out their capabilities in finance
Euromoney’s ground-breaking poll of large corporate users of insurance reveals the best insurance companies and brokers globally and by region. The chief executives of the industry leaders tell Peter Lee how these customers’ increasing sensitivity to, and sophisticated appreciation of, all manner of risks is fundamentally changing the insurance business. Modelling themselves on the pre-eminent Goldman Sachs investment banker whispering strategic advice into the CEO’s ear, insurers and brokers now want to be your risk management consultant.
FM GLOBAL IS an unusual insurance company. Its chairman and chief executive, Shivan Subramaniam, tells Euromoney, with a note of pride in his voice: "Yes, we blow things up, we burn them down."
The company runs a 1,600 acre campus in West Gloucester, Rhode Island. Set up at an initial cost of $80 million, it is a university of destruction. To measure how building materials and industrial equipment behave under extremes of wind, flood and flame, FM Global conducts the kind of tests that would delight the most malevolent villain of the most over-imaginative superhero comic strip.
It has even gone to the apocalyptic extreme of staging a controlled conflagration of a turbine generator so as to measure the consequences of a disaster at a power plant, with hundreds of gallons of burning oil from pressurized lubricating systems spewing into lakes of fire.
Ceiling temperatures in the FM Global fire laboratory reached 1,500o F (816o C) – way beyond the level at which steel is deformed.