• 04.01.08

Burn This

Insurance giant FM Global doesn’t have a single actuary, but when it comes to setting roofs on fire and blowing things up, it has plenty of experts.

Burn This
Barbecue from Hell:
 In the Slope Test Lab, FM Global conducts an E108 Slope Test–blowing flames across roofing material to see how fast it catches fire and then propagates. The firm says 45% of all property loss in an average year is caused by fire.
 | Photograph By Floto + Warner

An outsider might wonder how insurance giant FM Global stays in business. For one thing, staffers are constantly setting things on fire. Or blowing them up. Or swamping them. Some like to load pneumatic cannons with steel balls and launch them through plate-glass windows. “Our employees have no repression issues,” says CEO and chairman Shivan Subramaniam. Things get even odder when you walk around the company’s $80 million materials testing facility in West Glocester, Rhode Island, and realize what’s missing: actuaries. You know, the slate-gray souls who form the statistical backbone of most insurers–golems in gabardine who use historical averages to calculate future risk and say things like, “I’m sorry, but the numbers just aren’t there.” At FM Global, there are exactly none of them.


In fact, to the uninitiated, the firm looks as if it goes at the insurance business backward. Instead of having actuaries guess how often their insureds will suffer fire, wind, or water damage, FM Global focuses on the risks it can test and measure. For example, how long would it take to burn down a client’s factory if the floors were made of red oak? Or white pine? If the inventory were wrapped in cardboard? Or plastic? FM Global re-creates disasters in miniature, then advises clients on how to lower their respective risks by building or siting differently. It even helps invent and develop new building materials and safety equipment. (Choosing not to implement FM Global’s ideas comes, naturally, at a cost.)

“We decided it’s cheaper to keep it from happening than it is to pay for it after it happens,” says Dennis Anderson, vice president and chief training specialist. “We want our clients to experience distraction, not destruction.”

But on this cool November morning, destruction reigns. It’s in the resin dust exploding out the side of a concrete bunker; in the rows of fat hailstones incubating in a freezer; in the asphalt shingles being blown off a simulated roof by a Ford-truck-engine-powered hurricane; and in the giant 240,000 cubic-feet-per-minute blower sucking smoke and fumes from the Large Burn Lab (it would implode the entire 2.2-million-cubic-foot building in minutes if the walls weren’t vented to let in air).

And the muffled sound of men cheering? That’s the gallery of visiting Massachusetts Maritime Academy engineering students. They’re standing behind thick glass, wearing hard hats and big smiles, watching a 15-foot-tall pile of foam meat trays erupt in flames. “People who come in here always root for the wrong side,” grumbles assistant VP and research campus manager Dennis Waters. “They tell me, ‘But we came to see a fire!’ Well, I didn’t. That’s what I’m trying to prevent.”

Founded in 1835 as Factory Mutual, a collection of small mutual insurance companies, FM Global pioneered the use of indoor sprinklers to surround and drown rogue fires at piano factories; the company now insures more than 30% of the world’s Fortune 1,000 companies. And with a total insured value of about $7 trillion, Waters says, FM Global’s unusual approach pays for itself many times over. “At a semiconductor factory,” he says, “a small fire can equal a huge loss. We figure building our research campus cost us about 10% of what [our insureds’] claims would be if they didn’t build according to our guidelines.”

Tucked away in a downstairs corner of the facility, in the Slope Test Lab, technician Travis Heath is doing what he likes to do best: “Burn it. Break it. Blow it up,” he laughs, raising his voice over the electric fans that are coaxing little licks of fire up an inclined piece of roofing material. Then his expression darkens. “Look at that,” he says, pointing at the nascent blaze. “Full involvement in two minutes. And with that, you lost a million-dollar warehouse.”


Paul Hochman, a Fast Company contributing writer, is the gear and technology editor for Today on NBC.