FM piloting middle market entry with Essential brand, says CEO Roberts

By James Thaler

June 29 - (The Insurer) - FM is piloting a new insurance product called FM Essential aimed at middle-market manufacturers who want to establish resilience but need more time to meet FM's flagship standards, CEO Malcolm Roberts told The Insurer.

"We turn away 70% of our manufacturing prospects because they're not quite able to get to the FM standard and a timeframe for capital commitments and improvements," Roberts said at last month's RIMS Riskworld event in Chicago.

“I said, ‘Why do we keep turning them away and (let them) go to a competitor?’ Let's design it,” he added.

"They want to do resilience. They believe in the engineering. They say, 'I just can't do it in three years. I need six, seven, eight years'."

Roberts explained that these prospects consistently told FM that "resilience is no longer a choice. It's essential, but we can't get into it or get the knowledge".

"If I can move 10%, 20% of that business up into the larger mutual then we're in great shape," he said.

The FM Essential pilot launched on April 1 in the New York and Paris markets.

The product will be fully broker-distributed, leveraging FM's existing broker relationships and distribution channels, said Roberts, adding that the Rhode Island-based property mutual company has been exploring an expansion into the middle market for the past three years.

“I like to say with our client relationships: we date for a long time, but once we're in, we're in,” he said.

The new offering is part of FM's broader growth strategy, which includes FM Renewables, FM Affiliated for soft occupancy risks, and the flagship FM HPR product.

Sister publication E&S Insurer also on Monday detailed FM’s expansion plans into the E&S market through its acquisition of Velocity Specialty Insurance Company.

The company currently manages $11 billion in premium revenue and $26.5 billion in group capital, with $3.5 billion in capital growth last year.

Roberts emphasized that all growth initiatives aim to create value for FM's mutual clients, who number just 1,600 despite the company's 200-year history.

"Everything we do is targeted at accretive value or capital growth for the mutual club," he said.

The CEO emphasized that FM Essential operates as a stock company, meaning participants will not receive membership credits like mutual members.

"If you want to get that, don't make the leap, commit the extra capital, put the sprinklers in, make the leap to the flagship product, and get all those benefits," said Roberts, who positioned the expansion as part of FM's broader growth strategy, which includes recent moves into renewable energy and data centers.

"If it's property risk, we're going to be involved," he stated.