There is no argument that money drives the world's decisions. To that end we asked Bob Bailey, the Chief Underwriting Officer for Commercial Business at Fireman's Fund to comment on how the SMaRT Sustainable Standard fits into the insurance world. Bob is also on the MTS board.
Fireman's Fund elected to use the SMaRT criteria to underwrite their policies. Why did it make that decision?
BOB BAILEY: SMaRT standards help objectively define the best-in-class for an Industry. Critical to our thought process was the fact that SMaRT standards recognize not just important environmental components, but have the overall objective of a favorable social impact, thereby including the value of safe working conditions and products. We see the SMaRT standards as a better holistic benchmark that speak to areas of control and concern beyond just the environmental impact of the product itself. Since our coverage extends well beyond these boundaries why not seek a standard that does so as well.
Most people don't know anything about insurance risk assessment, could you tell the readers about the increasing challenge for the insurance industry and business at large?
BOB BAILEY: Whether you are an insurance company or not, any business should spend some time thinking about the future both in terms of opportunity as well as challenges. A Risk Assessment is simply a thorough understanding of those challeges. From an insurance company, clearly our fortunes follow those (to the extent that are covered by a contract) of our customers. These are very challenging times for our customers as the domestic economy continues to change, shifts in global markets bring new opportunities as well as new competitors, but perhaps the single largest challenge is the issue of variables to consider. From the standpoint of an insurer, storm patterns and severity are less predictable, rate structures for huge parts of the country may no longer be adequate. Building codes may not afford protection to the occupants, the legal climate could change radically as a new wave of environmental litigation overwhelms the legal system and certain business-agricultural concerns may not longer be sustainable due to shifts in the climate.
We need to react to these new risks in three ways; the first as a risk bearer (which I won't bore you with) in as much as we need to look for better forecasting models and watch our aggregations in places that we did not see as a challenge before; second, we should continue to help identify these trends for our customers and be able to provide solutions for them to help manage their risk, and lastly we need to understand our own role as a leading corporate citizen in helping reverse the change. Fireman's Fund as part of Allianz community, understands the global impact of climate change and our role in achieving sustainability.
Climate Change is being quoted as the reason for the increased number of forest fires we are experiencing in Southern California. I read a news release that Fireman's Fund offered to rebuild homes lost in those fires, "green." How is that going?
BOB BAILEY: Yes, we have offered our Southern California Fire victims "green" coverage. This includes:
- Energy Star appliance
- Energy Star structural envelope sealing (insulation, windows, doors, roofing, etc.)
- Energy Star heating and cooling systems
- Low Volatile Organic Compounds in paints, adhesives and sealants.
- Energy Star light fixtures
- Federal Emergency Management Program designated plumbing fixtures.
- Low emissions carpet
- Forest Stewardship Certified wood
In addition, we are offering replacement of landscape plants with native, fire resistive plants up to $10K per item, with a limit of 10% of personal property or $50K whichever is greater. We have received enough positive feedback from our California insureds on these options to begin exploration of "green" coverage on a more nationwide approach. This would complete our efforts to the extend the green rebuild option across our entire portfolio (both Commercial as well as Personal lines customers).
Interviewed by Mary Hunt.
We welcome your comments and emails.
Our thanks to Bill Walsh, the Founder of Healthy Building for spotlighting Forbo's high level of Sustainability and for recognizing the caliber of reporting that can be found in Forbo's Sustainability Brochure (download a copy in the upper left hand corner of this blog.) 
Bill's critique is especially meaningful as it comes just a few weeks in front of the Sustainable Life Media conference in Monterrey, CA. It's focus is on how to get out an authentic marketing message. By the sounds of Bill's write up, Forbo should be there as a presenter. 
Forbo is appearing in the following shows if you'd like to talk to them directly about how they became sustainable. 
Capital Markets Partnership
Sustainable Furniture Council
Big Green Purse
