Thomas A. Lawson, FM Global's new president and CEO, has beenwith the company for 35 years—an unusual accomplishment in today'sbusiness climate. He graduated from Illinois State University(Normal, Ill.) with a degree in occupational safety, a good fit foran insurance company focused on understanding the science of riskand creating solutions based on engineering and research.

FM Global's goal is to provide stability and consistency toclients and help them maintain “resiliency,” a recurring theme forthe company. The company uses science, research and engineering tohelp clients assess and mitigate their risks. This approach, Lawsonbelieves, helps companies rebound from losses more quickly.

In a personal interview, Lawson told NU that “It'squite an honor to be the CEO of a company that has had a successfulbusiness model for 180 years.” He doesn't plan to change the basicmodel, but the company will continue to adapt and be proactive tomeet changing conditions. The company is looking extensively atpredictive analytics and making better use of the data it hasavailable.

Most significant issues for 2015

Lawson said that the most significant issue across the board iscyber. “Clients are more aware of the ways they are at risk. Astechnology evolves, clients understand that they have moreexposure,” he added. FM Global started to cover cyber in early2000, but, Lawson said, there is still more opportunity here.

Terrorism in all its forms also is a majorrisk for 2015 and beyond. FM Global supported reauthorization ofthe Terrorism Risk Insurance Act (TRIA) as the best solution forclients in terms of limits and coverage. It also eliminates much ofthe uncertainty caused by varying state regulations.

When asked about risk management challenges, Lawson said, “Acompany has to decide for itself how to approach risk management.It's a competitive advantage to understand what you're up againstand tailor solutions, then implement them. So when bad thingshappen, you're the one left standing.”

Looking for a few good engineers

In keeping with company tradition, “We hire 100 to 150 engineersper year. We have approximately 5,500 employees. Of that number1,800 are practicing engineers and 1,800 are former engineers,”Lawson said. He also stressed the importance of hiring goodbusiness people who understand the risks a client faces and cancreate solutions based on detailed analysis of those risks.

FM Global engineers create 1,500 data points for every clientlocation they visit. The data gives the underwriters—also trainedengineers—a better picture of the individual client and conditionsat each location. The data analysis also helps clients make betterdecisions about their risk management priorities.

In an industry that is struggling to attract new talent, FMGlobal has been successful at hiring. According to Lawson, thissuccess goes to the distinction of who they are as a company. Theygive their new employee-engineers an opportunity to explore careeroptions, from consulting to sales. “You don't have to be anengineer if you don't want to,” he explained. New employees see avariety of industries and locations when visiting client sites, forexample, a manufacturing plant one day and a winery and bottlingplant the next.

The company has its own adjusters and claims processors, most ofwhom also are former or practicing engineers. Unlike many adjustersbrought in from other locations to help with major catastrophes, FMGlobal's adjusters know what's normal in an industry and locationbecause of the company's research and their own work with clients,Lawson explained, which leads to a 95% customer retention rate. Heacknowledged that the market is competitive and customers do shoparound, but ultimately most of them stay with FM Global.

Sharing with clients

Clients also share the benefits of good loss experience bygetting credit against premium in very good years, Lawson said.Since 1999, FM Global has given premium credit seven times for atotal of $2.5 billion. “This is a testament to our clients who workhard to mitigate their risk and thus their losses,” heexplained.

Looking toward the future, Lawson observed there are always newexposures and new hazards, but that gives FM Global the opportunityto develop new solutions. The company will continue to rely onscientific, research-based loss prevention techniques, and a stableproduct to meet future challenges, however. “Our goal is to answerclients' questions before they ask,” he said.