This beautiful eye catching building in Pasir Panjang is the office for FM Global, an American mutual insurance company that specialises in loss prevention services primarily to large corporations throughout the world.
What sets them apart from others is that they employ a non-traditional business model where risk and premiums are determined by engineering analysis as opposed to historically based actuarial calculations. This business approach is centered on the belief that property losses can be prevented or mitigated.
The history of how it started is fascinating. During the depression of 1835, a prominent textile mill owner Zachariah Allen attempted to reduce the insurance premium on his Rhode Island, USA, mill by making property improvements that he believed would minimize the damage in case of fire.
At that time, insurance premium increases for losses were shared among all insureds, regardless of individual loss history. The concept of loss prevention and control was virtually unheard of at the time. To Allen, a proactive approach to preventing losses made good economic sense.
After making considerable improvements to his mill, Allen requested a reduction in his premium, but was denied. He called upon other local textile mill owners who shared his loss prevention philosophy to create a mutual insurance company that would insure only factories with lower risks. This approach should result in fewer losses and smaller premium payments. Whatever premium remained at the end of the year would be returned to policyholders in the form of dividends. The group agreed, and by year's end, formed the Manufacturers Mutual Fire Insurance Company, the oldest predecessor of FM Global.
