“We say this again and again to our clients,” says Subramaniam, “the goal is to not have an interruption. And if they do have an interruption, to make sure they get up and start to produce products or deliver services as quickly as possible. And we help them do that. And then at the tail end of that is really the insurance product that takes care of, to some extent, the economic loss they're going to have.”

As further evidence that Subramaniam and Lawson are reading from the same playbook, both give nearly identical answers when summing up the message the company brings to its clients:

“Insurance alone is not enough. The focus should really be on risk management,” Subramaniam says.

Says Lawson: “Insurance alone isn't enough. You really need to take control of your own destiny.”

Growing with FM Global

The similarities in their outlooks are at least in part due to the long careers both Subramaniam and Lawson have had at FM Global, reaching back well before the current company was formed through the merger of five organizations in 1999.

Subramaniam joined Allendale Insurance, an FM Global predecessor company, in 1974 and was elected president in 1992. After the 1999 merger, he was elected president and CEO of FM Global and was named chairman in 2002.

Lawson began working in the organization in 1979 as a field engineer, where he helped clients understand risk. He moved to the insurance side eight years later, and finally moved to the Northeast and managed the integration of the research entity into the newly merged company.

Lawson notes the benefits of not just his longevity in the organization, but the different roles he has assumed over the years, saying he has had “different careers in the same company.” He adds he has gained “firsthand knowledge of where it all starts” having worked as a field engineer, and has gained valuable insights working among teams in a wide range of areas within the company.

The years put in at FM Global have instilled an appreciation for the company's tradition and people in both Subramaniam and Lawson.

Asked to name his greatest accomplishment during his time as CEO, Subramaniam does not mention the company's growth—from about $1 billion in revenue at the time of the 1999 merger to nearly $6 billion today—but rather his luck in being able to “lead an extraordinary group of people over time. I think we have such a great product and everyone's proud to deliver that product on a worldwide basis, and that's what's made us successful. That's at the heart of our success.”

Lawson likewise says his 35 years with the company have given him an appreciation for “how great our people are,” and he says the company's “long-term tradition of stability” will not change even though its leadership will. “That's how we operate the company,” he says.

That said, changes are afoot in both the insurance market and the global business landscape FM Global's clients operate in, and the company must adapt and adjust.

Global clients and growing risks

Subramaniam, reflecting on the challenges during his time as CEO, says, “Tomorrow always trumps yesterday.” While his initial challenge in 1999 was integrating five companies into a single enterprise—and doing so during the prolonged soft market of the late 1990s—he speaks more in-depth about the current challenge: serving clients that are rapidly expanding into new regions around the world.

The typical FM Global client, he says, is multinational and growing outside of its own footprint—for example, a company based in Cleveland or San Francisco, but growing outside of North America.

“And when they do grow outside of North America, almost always they're not building what we call greenfield facilities; they're buying some existing facility somewhere else to add to their network,” Subramaniam explains. “And almost always the quality of those locations, of those divisions they acquire, are not as good as the quality of the locations they have within their existing footprint. So our clients are growing, but the risk quality is getting worse and the risk-management challenges are getting more significant.”

On top of that, he says clients are not all growing in the same territories, but rather in different regions with different licensing requirements and regulations.

For FM Global, which places its emphasis on risk management, this evolving global landscape, while presenting new challenges, has also brought opportunity. Subramaniam points out more companies today are focusing on risk-management needs, and the role of the risk manager within companies is expanding.

“One of the reasons for our success is the fact that the risk-manager role in our clients' organizations has become so much more sophisticated and is at a much higher level than it used to be,” he says. “So the result of all of that is our products and services have become more attractive because the clients that we deal with—these things are more important to them.” He says the same companies 25 years ago may have been just buyers of insurance, whereas today they are managing the risk of the enterprise, which dovetails with FM Global's strategy.

As for the challenges, Subramaniam says as clients grow, the risks grow with them, and companies' rate of expansion can outpace the ability to effectively manage the risks. To assist clients, Subramaniam says FM Global routinely works with local authorities in the new territories to improve codes and standards. The insurer also aggressively looks at engineering and risk-management schools in those territories to find local people to hire and train (with the training almost always done in North America). FM Global hires locally, he says, but must make sure the focus around the world is no different than the corporate culture.

Lawson says the key for FM Global, as a research-based company, is to make the necessary investments in research and science to help stay on top of the developing risks. The business model for the company does not change, he says, but the technology does, particularly as it relates to emerging risks such as cyber.

That focus on science and resiliency also helps set FM Global apart as the insurance marketplace changes. Lawson mentions the capacity in the reinsurance market today, saying there is “more capital than we've ever seen.” It “has a competitive effect,” he says, but adds, “The key for us—regardless of what happens in the market, our model doesn't change.”

FM Global, he notes, has stuck to commercial property, and will continue to do so.

Subramaniam agrees, noting the company's overall approach has remained the same, even if the scale has changed. He says there's always a place for a company that can provide services to clients while also offering large amounts of underwriting capacity on a worldwide basis. “There's a place for a player like that, and that's FM Global.”

A different insurance world

He adds, “The whole issue is that we continue to do the same thing that we do, but the scale has gotten quite dramatic.” He says if someone had asked him in 1999 if he expected the company to be the size it is today, he would probably have said no. “If you look back, did we expect to be this much bigger? No. Did we expect to have scale help us as much as it has? No. Those would be the surprises from that point of view.”

Subramaniam also talks about the changes the insurance market in general has undergone in that time. “As an industry, there's no question we're more analytical and significantly more sophisticated in terms of the models and technologies we use. If you look at the industry itself—and I just mean the commercial-property industry—the level of sophistication we have today in terms of how we assess risk and deliver risk as an industry is significantly better and significantly more focused than it used to be 16 yrs ago.

“Clearly I think the client and policyholder has benefitted enormously because as an industry we're much better at doing what we do.”

Insurance processes have also evolved, Subamaniam says, noting that 16 years ago it was challenging to put together a multinational policy involving six to eight different currencies. “Today those things are taken for granted—how people do that, he says.

He adds, “Sixteen years ago, it could take 9-12 months to produce a policy. Today we deliver a policy to a client more often than not before the inception date.”

Legacy

Asked what philosophy he has tried to instill at FM Global, Subramaniam pauses before saying, “I'm not big on introspection.” But he notes he has said publicly many times that FM Global is an organization built on teamwork, and operates under the idea that different people with different skills can come together and produce and deliver a product. “I've always felt that a decision you come to with an associate is probably better than a decision that you've come to by yourself,” he says.

He explains a typical client-service team manages very large relationships, and includes an account manager, an account engineer and policy experts. “When you have so many different relationships, if you don't have a good account team working well from a teammate point of view, you won't be successful,” Subramaniam says.

Prompted for advice to pass on to Lawson, Subramaniam says, “Absolutely. The advice is always, don't do what I did. Be your own person.”

But he adds of Lawson and Executive Vice President Jon Hall, “They're very capable people. I've worked with them for many years. I have the highest regard for them, and I know they'll make this company even more successful than it's been in the past.”