German insurance giant Allianz said it will absorb Fireman’s Fund Insurance Company’s commercial lines business into one of its own eponymously-named divisions.
Meanwhile, after days of declining to comment, Allianz has admitted it is considering “strategic options” for Fireman’s Fund’s personal lines insurance arm. Fireman’s Fund itself an Allianz division. Various media reports suggested that plans are underway to sell the business, though Allianz and Fireman’s Fund have refused to comment until the Sept. 17 announcement.
Specifically, Fireman’s Fund’s commercial property division will now be integrated into Allianz Global Corporate & Specialty (AGCS), as had been speculated in media coverage over the weekend.
Allianz noted that the move follows similar action in 2009, when it transferred the Fireman’s Fund marine business to AGCS. The action added close to $600 million in annual gross premiums to the division and made it “one of the leading providers of specialty insurance in the U.S.,” Allianz said.
That same idea – creating a larger powerhouse division in the marketplace – is in play with the absorbing of Fireman’s Fund’s commercial property/casualty business into AGCS. The combined operation will produce more than $3 billion in revenues, based on gross written premiums in 2013, according to the company.
Andrew Torrance, CEO of Fireman’s Fund Insurance Company, put a positive spin on the development.
“This moves gives our commercial P&C business greater direction and focus,” Torrence said in a statement. “AGCS will offer many benefits to Fireman’s Fund’s clients and business partners in the U.S., with its global reach, recognized expertise and AA rated financial strength.”
Axel Theis, the CEO of AGCS, said in a statement that Fireman’s Fund’s commercial P&C business will help his division “focus on opportunities in commercial insurance, operate under the Allianz brand” and build on products AGCS already offers in the U.S.
There may be a more ominous future, however, for Fireman’s Fund’s personal lines business. Beyond the now-public plans for Fireman’s Funds commercial lines business, Reuters and others initially reported over the weekend that Allianz would sell off Fireman’s Fund’s personal P&C business, due to repeated operating losses.
Allianz and Fireman’s Fund initially declined comment on the reported sale plans. Their admission that they’re considering “various options” to “build scale” for Fireman’s Fund’s personal lines business inches that possibility closer to that reality, however, and puts the future of Fireman’s Fund as a brand name very much in question.
Robyn Hahn, Fireman Fund’s Chief Marketing Officer, declined to address specific questions about the future of Fireman’s Fund’s brand, and whether Allianz would sell off its personal lines business.
“At this early stage, we cannot provide more information than is already in the announcement,” she said via email.