In last week's editorial, I expressed an eagerness to startmeeting NU's readers and to engage in conversation withyou about the industry.

One of the first people to takeme up on the offer was Michael LaRocco, CEO of Fireman's FundInsurance. We met March 8 in Manhattan in the offices of the parentcompany of Fireman's Fund, the financial-services giant Allianz, ina 49^th-floor conference room with a commanding view ofCentral Park. “The view is paid for by the asset-management side ofthe business, not the property and casualty side,” Mr. LaRoccojoked as we sat down for our talk.

I lucked out with my first P&C interview—I found Mr. LaRoccofunny, frank and filled with spirited opinions about what theindustry does well—and where it needs to improve. I was alsoimpressed with the clarity of his vision for where he wants to takeFireman's Fund and how he plans to get there.

 What follows are some highlights from ourconversation—read an expanded version on our website.

On Current Market Conditions: “There is noindication prices are going to do what they need to be doing, whichis going up. The underlying costs of the commercial lines businessare rising: the cost to repair buildings, the cost to repairautomobiles, the cost to repair people—all are rising. As such,prices should be going up. At Fireman's Fund, we are staying verydisciplined on our pricing; we are increasing our ratesappropriately. So it's frustrating and very disappointing to seethe lack of discipline in the industry. It's bad behavior, and theindustry should be ashamed of itself…The only positive indicatorsare that it looks like companies have begun to run out of gas inthe tank from prior-year reserve releases.”

On Growing the Business: “Our first goal is tomake an underwriting profit on each of our lines of business. So atthe end of the day if we can't grow because we have disciplinearound underwriting profit, that will be something we'll have toaccept. But it's still a very inefficient market, so there are lotsof opportunities for us to grow. There are some areas of thecountry where we don't have a large amount of volume, so there areopportunities on a geographic basis. There are productopportunities: highly protected risk is an area where we'regrowing. We're seeing some significant growth in our entertainmentcenter. We're seeing small-business growth. We fully anticipatethat we can grow this year.”

On Appealing to Independent Agents: “If I'm anindependent insurance agent and looking for an efficientpartner—particularly an independent-agent-only company that's alsonational, that has the combined financial strength of Allianz andFireman's Fund, and that also has everything from personal-linesauto all the way through complex commercial risk expert lines ofbusiness—we really fit that bill.”

On Attracting Talent: “The industry has beenalmost borderline pathetic in that we haven't really been able toattract people as much as we should, and it's a shame becauseinsurance is a powerful, very exciting industry. What we do is suchimportant work. We protect individuals and businesses, and we do itreally well—but somehow we allow ourselves to be painted in anegative light.”

On Technology Investments: “We're a very smallwriter today of automobile insurance, but we want to become abroader writer. We also want to write middle-market homeowners, aswell. And if you write in auto and home in the general marketacross the U.S., to do that in this day and age you have to havesophisticated products, which means multivariate models and theability to match rate to risk at a very segmented level. And to dothat you have to have a sophisticated quote-and-issue-typetechnology platform. So that's where some of the investments we'vebeen making over the last couple of years have been.”