Part of Fireman's Fund goes to AGCS

Part of Fireman's Fund goes to AGCS

The non-life commercial business of California-based Fireman's Fund is to be integrated into Allianz Global Corporate & Specialty (AGCS), the corporate specialty arm of European insurer Allianz.

AGCS chief executive Axel Theis said that "the integration of the Fireman's Fund commercial P&C business into AGCS allows Allianz to focus on opportunities in commercial insurance, operate under the Allianz brand and build upon the range of commercial P&C insurance solutions and relationships".

The newly combined operations will generate annual premiums of more than $3bn.

Of the remaining part of Fireman's Fund, a personal lines division that focuses on the well-off, Allianz said that "various options are being considered to also build scale for the personal lines business of Fireman's Fund". That, according to reports in the German press, was code for a sale of the business being under consideration.

Fireman's Fund has not been a strong performer for Allianz, with reserves for past claims often having to be increased. It decided to go for profitability by abandoning the traditionally low-margin volume business and focusing on niche sectors. That did not appear to have worked in H1, with Allianz chief financial officer conceding that the subsidiary had so far been a disappointment in 2014. The combined ratio rose to more than 121%, with a hope at the start of the year that an underwriting profit would be made now "completely out of reach".

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