Leadership Turnover, and Women Executives, Rule at Fireman’s Fund

By | July 7, 2011

On Tuesday, Lori Dickerson Fouché was named president and CEO of Fireman’s Fund Insurance Co., making her the company’s fourth CEO in recent years.

Fouché succeeds Michael LaRocco, at the helm of one of the nation’s largest property/casualty companies.

Her appointment means that four of the top executive posts at the company are held by women: president/CEO, chief financial officer, chief distribution/sales and marketing officer, and chief counsel/secretary.

“Fireman’s Fund has a strong commitment to diversity throughout our organization, and like the saying goes, ‘it all starts at the top,'” spokesman Atle Erlingsson told Insurance Journal.

Fouché was chosen to lead the German-owned, California-based insurance company by Fireman’s parent company, Allianz SE. She was subsequently “voted in” by the Fireman’s Fund board of directors, according to Erlingsson.

Fouché is the fourth person to lead the company since January 2007, when LaRocco’s predecessor, Chuck Kavitsky became president of Allianz of America.

Kavitsky’s departure, however, was made brief by his successor’s resignation. Joseph Beneducci left Fireman’s Fund after less than six months in the executive office. Kavitsky returned to Fireman’s Fund as interim CEO until March 2008, when LaRocco’s tenure began.

CEO Changes Noted

The tide of leadership changes at Fireman’s Fund has not gone unnoticed by industry analysts, including Moody’s Investor Service Vice President Alan Murray in New York.

At Fireman’s Fund, there is a “high level of turnover, especially at a CEO level,” the senior credit officer for Moody’s Insurance-Financial Institutions Group told Insurance Journal.

“It’s clearly an area of interest to us, but would likely be of greater concern were Fireman’s Fund an independent, publicly traded company,” Murray said.

Fireman’s Fund also announced Tuesday that it will name, in coming months, a new chief financial officer to replace Jill Paterson, who is retiring at the end of 2011.

Fouché Hired in 2006

Widely considered a pioneer among female insurance industry executives, Fouché was named president and CEO less than six years after she joined Fireman’s Fund as a marketing executive.

She parlayed that mid-level marketing position into one over the entire company, with stints in-between as chief operating officer to the company’s specialty insurance division and president of Fireman’s Fund commercial insurance business.

Prior to the Fireman’s Fund campus in the Bay Area city of Novato becoming her professional home in 2006, Fouché was as a senior vice president for the insurance management firm of Chubb & Son Inc., a New Jersey-based subsidiary of Federal Insurance Co.

The New York native holds a bachelor’s degree in history from Princeton University, a master’s degree in business administration from Harvard Business School, and a professional certificate in integrated marketing from the Kellogg School of Management at Northwestern University.

Company Assets

Founded in San Francisco in 1863, the storied Fireman’s Fund sells residential and commercial lines of property/casualty insurance nationally, through independent agents and brokers. The company was named for its early, charitable practice of giving 10 percent of its annual profits to the widows and orphans of lost San Francisco firefighters.

In 1968, Fireman’s Fund was acquired by The American Express Co., which held the company for 17 years. More recently, Fireman’s Fund was acquired in 1991 by Allianz SE, a Munich-based global financial services holding company.

As of March 31, Fireman’s Fund had statutory assets of $10.7 billion, with $3 billion in policyholder statutory surplus, according to company financial reports. As an Allianz subsidiary, its gross written premiums grew to $4.4 billion through 2010, up from roughly $3 billion in 1992.

Insurer’s Ratings

Fireman’s Fund and Allianz SE have separately been assigned high marks by Moody’s and fellow credit-rating agencies Standard & Poor’s and A.M. Best Co. Inc.

Standard & Poor’s Ratings Services, in November 2010, lowered the company’s counterparty credit and financial strength ratings (FSR), from AA- negative to A-plus stable, citing a decline in the insurer’s “overall competitive position, weak underwriting results, and deterioration in the quality of the company’s capital base.”

In December 2010, Moody’s affirmed its A2 insurance financial strength (IFS) ratings of the company’s credit worthiness, while A.M. Best upgraded the company’s issuer credit ratings (ICR), to A+ from A.

On Allianz’s financial strength, Moody’s rated the company at Aa3 in November 2010, while S&P affirmed an AA rating in September 2010, and A.M. Best affirmed an A-plus designation in April 2010.

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