[EXTERNAL ARTICLE FOR TRADE PRESS/PRESS RELEASES]
“Green construction has the potential to be as revolutionary in the building
industry as air conditioning was in the 1950s and elevators were in the early
1900s.” — Stephen Bushnell, Product Director, Commercial Business, Real
Fireman’s Fund and Allianz Lead Green Insurance Movement
Fireman’s Fund is the first and only insurance company to offer property
coverage tailored to building owners committed to new green, or
environmentally sustainable, construction or rebuilding. Because the Company
has a tradition of standing behind its product offerings, Fireman’s Fund has
undertaken a serious endeavor to align its own nationwide buildings with green
concepts and vision.
“Green has become ingrained in our corporate culture and values,” said Joseph
Beneducci, chief executive officer and president of Fireman’s Fund Insurance
Company. “This demonstrates to our policyholders, agents and communities that
we are in the forefront of the green building evolution and serious about
reducing Fireman’s Fund’s own greenhouse gas emissions.”
“The green coverages have resulted in so much favorable publicity that our
Company is seen as a visionary leader that understands how to truly
differentiate,” said Beneducci. “We are viewed as a green thought leader and our
expertise is widely sought after.”
Forefront of Building Evolution
“We all want to work for a company we are proud of,” said Beneducci. “I think
employees expect us to behave with integrity in everything we do and this is
another opportunity to test our collective values.”
As a leading member in the financial services sector, he emphasized, “Fireman’s
Fund has an opportunity to enter the sustainable development and climate
change discussion and contribute our perspective with the hope of helping
customers, employees and people everywhere improve their overall
Beneducci, who was named to his current position January 1, added, “We can
also contribute to our parent company Allianz’s global efforts to combat the
effects of climate change by serving as a North American model and educating
the public about the potential impact of dragging feet on these issues.”
Move Toward Sustainability
Fireman’s Fund has created the Green Common Ground Team, comprised of
employees who have a working interest in green and who are working to
promote green and sustainable actions among Fireman’s Fund employees,
agents and customers. The team includes participants from facilities
management, legal, loss control, marketing and underwriting.
“We believe that our employees, agents and customers are energized by our
initiatives and excited to be involved,” said Stephen Bushnell, Fireman’s Fund
Product Director, Commercial Business, Real Estate Industry, who created the
As Commercial Business Real Estate Product Directors, Bushnell and David
Cohen, Real Estate Industry, develop and implement innovative insurance and
risk management solutions for the commercial and multi-family-unit real estate
industries — including products and services for green buildings.
Implementation includes working with Fireman’s Fund field offices to identify
green opportunities with both existing and potential policyholders, discussing
the Company’s green coverages with agents and policyholders, and raising
brand awareness through speaking opportunities in the Real Estate and green
Defining Green Buildings
Today, building owners and developers are proactively seeking ways to make
their buildings more energy and water efficient to save on costs and to make
their sites more attractive to tenants and employees. When that goal is reached,
and actually quantified, professionals certify the building as “green.”
“Green, or sustainable, buildings use key resources like energy, water, materials,
and land more efficiently than traditionally constructed buildings,” said
Bushnell. “With more natural light and better air quality, green buildings
strongly attract tenants who prioritize employee health and comfort. This,
according to numerous studies, translates into increased retail sales, higher
productivity and fewer employee sick days taken.”
Bushnell defined green value:
• Lower energy costs equals higher net operating income (NOI)
• Lower energy use equals lower carbon footprint
• Reduced water consumption equals respect for scarce resources and higher
• Green space equals healthy indoor environment — elimination of volatile
organic compounds (VOCs) in the air, increased thermal comfort, improved
• Improved “view” equals higher productivity, lower absenteeism, happier
employees, reduced turnover — also higher retail sales and stronger test scores
• Green commitment equals employees who see a higher purpose to their work
Inside a Sustainable Building
Newly constructed or remodeled green buildings are likely to contain a fully
digital building management system (BMS), advanced lighting system, water-
efficient plumbing fixtures, and a roof that is “cool” — not absorbing and
holding heat as traditional roofs do. Materials throughout the building are
selected to maximize recycled content with a minimum amount of VOCs.
Innovative green building design strategies often include:
• A fully digital BMS with dedicated Internet access that continuously monitors
temperature, CO2 levels and humidity.
• BMS maximizes outside air and runs the HVAC system to meet actual rather
than anticipated demand, thus saving over 30 percent on utility bills.
• Most workstations receive direct or indirect sunlight. Glass partitions and low
height wall dividers also provide exterior views to most of the occupants.
• Special motion sensor light fixtures reduce light pollution leaving the site.
• New high-efficiency plumbing fixtures use only 1.5 gallons of water.
• Garden terraces landscaped with native plants that significantly reduce storm
• All vendors are required to use low-impact fertilizers, cleaners and pest control
Measuring Environmental Impact
Green buildings are replacing traditional construction as businesses become
aware of their advantages, reports the United States Green Building Council
(USGBC). The council, comprised of allied professional organizations promotes
the development of buildings that deliver high performance inside and out.
As the leading coalition on environmental building matters, USGBC influences
the way buildings are designed, built and maintained. Their Web site
(www.usgbc.org) states that green buildings, when compared to conventional
• 25-30 percent more energy efficient
• Characterized by lower electricity peak consumption
• Often generating renewable energy on-site
• More likely to purchase grid power generated from renewable energy
“There’s a roadmap showing how successful a green building performs
compared to peer structures,” said Bushnell. “It’s called the Leadership in
Energy and Environmental Design (LEED) System™— developed by USGBC
to provide a guideline and rating system for green buildings. USGBC currently
certifies 600 buildings and 6000 more under construction.
LEED is a voluntary, consensus-based national standard for developing high-
performance, sustainable buildings. LEED standards cover:
• New construction and major renovation projects
• Existing building operations
• Commercial interiors projects
Integrating the Green Mindset
“Fireman’s Fund’s green vision for its own sites is to incorporate
sustainable, environmentally friendly design features into our real estate
specifications — everything from easy access to public transit, to low VOC
flooring, paints and furniture, bathrooms with automatic sinks and toilets,
energy-efficient lighting fixtures. Where possible, this includes obtaining LEED
certification for our sites,” said David Cohen.
“We want to see healthier, more productive employees,” said Cohen. “Along
with improved employee morale and fewer sick days, this should have a long-
term positive business effect on controlling health insurance and workers’
compensation costs as well.”
An additional benefit for Fireman’s Fund will be joining with its property
management firm, Cushman Wakefield, to drive the corporate real estate market
toward providing green facilities as a matter of course. Building owners depend
on attracting and retaining tenants and as more demand green space, landlords
will increasingly recognize that they need to go green to remain competitive.
Common Ground Team Efforts
Cohen, also on the Green Common Ground Team, emphasized that a key team
goal is raising awareness both internally and externally of Fireman’s Fund’s
green efforts — and supporting Allianz’s Sustainable Development Initiative.
“Our goals go beyond the insurance product we’ve created,” he said. The goals
• Realizing the economic benefits of going green as an organization —
energy and water savings, more productive and healthier employees
• Raising awareness both internally and externally about the potential impacts of
• Contributing to Allianz’s Sustainable Development initiative by reducing
Fireman’s Fund’s greenhouse gas emissions
Collaboratively Creating Policy
Fireman’s Fund General Counsel’s Office (GCO) is working with Green
Common Ground team members in supply management, corporate real estate
and facilities that can reduce Fireman’s Fund’s impact on environmental
“Working collaboratively to create a policy that works for Fireman’s Fund, and
is consistent with Allianz goals, is the key GCO responsibility,” said Amii
Barnard-Bahn Senior Counsel and Director, Ethics and Policy Governance.
“Networking with other leading companies is crucial to learn about their
environmental policies and programs, how they started them, and to get ideas on
where to start making an impact,” she added.
“Writing a policy that establishes our commitment to minimizing and managing
our impact on the environment — and is flexible and broad enough to grow with
us over time — is a key accomplishment,” said Barnard-Bahn. “The momentum
Dallas and St. Louis Projects
Corporate Real Estate sees Fireman’s Fund becoming an industry leader in
building and maintaining environmentally considerate offices.
“Our efforts are driven by our desire to ‘walk the talk’ in support of Fireman’s
Fund’s green real estate products, by our parent company’s social responsibility
values and by our belief that green is good for business and the right thing to
do,” said John Vallor, Senior Director, Corporate Real Estate. His department
manages the selecting, leasing and building of Fireman’s Fund offices,
“We are in the best position to provide green environments for Fireman’s Fund
operations,” said Vallor. “We are currently evaluating how we can build new
offices near or to the LEEDS standard. In selecting buildings for Company
operations, we are also in the best position to find buildings that fulfill our green
“Our work to reduce energy and water consumption and to increase recycling
have helped cut our facilities costs,” said Vallor. “We have also benefited from
the positive experiences our employees have had working in a more
environmentally sensitive workplace.”
Corporate Real Estate’s immediate goals are to build the Dallas and St. Louis
Enterprise centers with an eye toward LEEDS certification.
“While we might not achieve full certification, we will know that we have built
as responsibly as possible to contribute to the environment and to the welfare of
Fireman’s Fund employees,” said Vallor.
Positive Work Environment
Fireman’s Fund Human Resources is committed to providing a safe and healthy
work environment for all employees nationally.
“We believe that participating in and achieving green certification demonstrates
our Company’s commitment to being a valuable community partner in
environment,” said Dean Selna, National Facilities Manager. “We also believe
that being a green business makes our employee population proud of the
company they work for and that positive view ultimately increases
Facilities Management is responsible for the overall green initiative in recycling
and waste management programs, electricity and water consumption.
“Goals for Facilities Management include increased national participation in
recycling and waste management programs,” said Selna, “along with increased
communication and marketing of our green building status and programs.”
Marin Green Building Citation
“Our San Marin Home Office campus was recently named as a ‘Marin Green
Building’ by Marin County for our work on resource conservation,” said Selna.
Renewal of our Home Office Marin County resources:
• Achieved a 77.4 percent solid waste diversion rate from landfills in 2006
• Installed touchless water-restricted faucet, toilet and urinals
• Installed 100 percent recyclable carpeting in major corridors and halls
• Installed lower wattage lighting that produces more lumens
“These results align with Allianz strategy going forward,” said Selna.
The Allianz Green Strategy
Scott Steinmetz, CAT Product Director, Personal Insurance, represents
Fireman’s Fund as a Working Group Member on Allianz’s Strategy for
Sustainable Development Team. He also represents Fireman’s Fund as both a
forensic environmental engineer and from a CAT management perspective.
“Weather-related catastrophes naturally are related to climate change,” said
Steinmetz, who recently addressed the First Annual Climate Change Conference
sponsored by the University of Washington School of Law.
“As I explained to the conference, Allianz is a world leader in sustainable
development. We hold leadership positions on the World Business Council for
Sustainable Development, we have an international Strategy and Working
Group on Sustainable Development and we have recently convened the Allianz
Climate Core Group.”
That last group’s long-term objective states: “Allianz Group shall become a
global leader of climate change related products and services through
strengthening the business opportunities, optimizing the risk management and
fostering the synergies within the entire Allianz Group!”
“U.S. business seems slow to recognize opportunities to contribute to the
discussion of sustainable development and climate change,” said Steinmetz. “It
has taken organizations in the U.S. years to recognize that maintaining economic
viability is not mutually exclusive of being socially responsible as a business or
of attempting to minimize a business’s ecological footprint. By this, I don’t
mean to convey that it is unimportant to recognize the fundamental necessity of
financial viability. Financial viability is an absolute necessity when it comes to
Steinmetz believes that both sustainable development and climate change are
much longer-term perspectives and contemplations. “Both concepts recognize
that there are broader risks and uncertainties that will affect much of humanity,”
“There have obviously been initiatives undertaken historically within the
framework of good property management by Fireman’s Fund in the U.S.,”
Steinmetz added. “With the connection to Allianz’s Sustainable Development,
there exists a forum for increased contribution and a context for receiving
recognition of such contributions from our parent company, our employees and
communities across the nation.”
Allianz Sustainable Development
Steinmetz emphasized that Allianz sees Sustainable Development as three
main pillars also referred to as triple-bottom line reporting:
• Financial Viability
“Integral to this Allianz initiative is the Environmental Management System
(EMS) in which we track our environmental footprint — energy consumption,
travel, waste generation, water consumption. These all result in a calculated
Greenhouse Gas (GHG) emission number,” said Steinmetz.
The numbers generated are rolled up into a survey governed by Sustainable
Asset Management (SAM) of Switzerland. The results of our survey answers are
ranked within each industry peer group and participants receive a SAM rating
that impacts Allianz’s standing in the Dow Jones Sustainable Index (DJSI).
“Our 2005 Allianz results propelled us past Swiss Re — the major international
reinsurance firm — into first place in our peer group,” said Steinmetz. “This was
a significant result that was followed by Allianz’s Climate Core commitment to
achieve a 20 percent reduction in GHG emissions by 2012.”
Allianz Investment in the Future
“A recommendation has been prepared within the Sustainable Development
Working Group that is going before the Board of Allianz SE as a proposed
mandate from Michael Diekmann, chairman and chief executive officer, that all
Allianz offices have at least a minimal EMS.
“The 20 percent reduction will only be achievable if we first have a
measurement tool and then we raise the awareness of how each facility may
contribute toward this reduction,” said Steinmetz.
The Allianz Climate Core Group has also sponsored and promoted the following
contributions at their European subsidiaries:
• Launch biomass insurance package at Allianz Sachversicherung
• Launch first hybrid car insurance globally at RASFIN
• Launch Eco Trend and Energy Efficiency Fund at Allianz Global Investors
• $400-$665 million (€300-€500 million) to be invested during the next two-
three years in renewable energy technologies at Allianz Capital Partners
• Investment of $13.3 million (€10) in European Carbon Fund in 2005.
Why Buildings Are Changing
“Green buildings are a viable trend that is just going to grow stronger,” said
Real Estate Product Director Bushnell. “The question no longer is why would
developers build green? But, rather, why would anyone not build green?”
“There is an increased public awareness and public consciousness regarding
what should or should not be present in a building,” said Bushnell. “This
consciousness, coupled with a generalized concern for the total environment, has
evolved into a new way of thinking. Gone are the days when indoor air quality
problems were dealt with reactively — and then only if enough people
complained of similar symptoms.”
“Green construction has the potential to be as revolutionary in the building
industry as air conditioning was in the 1950s and elevators were in the early
1900s,” said Bushnell.
Buildings account for 39 percent of the nation’s total annual energy
consumption in the U.S., whereas transportation — including cars — comprises
only 27 percent of total energy use, according to recent studies by the U.S.
Departments of Energy and Transportation.
Real Savings Actualized
“Green buildings significantly lower energy consumption and costs compared to
standard buildings,” said Bushnell. “Green Buildings boast lower operation and
The State of California’s Joe Serna Building, in Sacramento, has realized
savings of $1.50 per square foot annually — or $1,425,000. At an 8 percent cap
rate, this equals $17,812,500 additional building value, according to
GreenOrder, a sustainability strategy and marketing firm in New York City and
Thomas Properties Group, the building’s developer and manager.
The Environmental Protection Agency (EPA) estimates that a 30 percent
reduction in energy use equates to a 5 percent increase in asset value. Further, a
30 percent reduction in energy use generates $25,000 for every 50,000 square
feet of occupied office space.
Another attractive element of green construction is the Energy Policy Act of
2005 that provides for federal tax deductions for highly efficient commercial
buildings and tax credits for fuel cells and micro-turbines used in a business.
States and municipalities have also enacted a variety of incentives aimed at
green buildings and reduced energy and water consumption.
Productivity and Health
“Numerous studies indicate that employee absenteeism is reduced by up to 15
percent in green buildings. The impacts on workers’ compensation and health
insurance costs, employee morale, tenant satisfaction and productivity are
obvious,” said Bushnell.
Four of the attributes associated with green building design—increased
ventilation control, increased temperature control, increased lighting control and
increased use of daylight interior illumination — have been positively and
significantly correlated with increased productivity, according to USGBC.
“A one percent increase in productivity — equal to about five minutes per
working day — is equal to $600 to $700 per employee per year,” reports
USGBC. “A 1.5 percent increase in productivity — or a little over seven
minutes each working day— is equal to about $1000 per year. The relatively
large impact of productivity and health gains reflects the fact that the direct and
indirect cost of employees is far larger than the cost of construction or energy.”
Unique Risk Transfer Program
“We’re in the business of repairing and reconstructing buildings and we
understand, for the reasons just cited above, that for many of our policyholders it
makes sound financial sense for them to rebuild or repair using a green
construction model,” said Bushnell.
“The new Fireman’s Fund’s Certified Green Building coverage enables an
insured to reconstruct or renovate a traditional building — after a covered loss
— with green features so that the building can be replaced as a partial or total
green building,” said Bushnell.
“Policyholders need an insurance solution that will protect both their business
and environmental investments. We’ve got the answer,” said Bushnell, who
conceived of, researched and developed Fireman’s Fund’s Green
Insurance products. He has also promoted the coverages through media
interviews and speaking opportunities.
What Fireman’s Fund Covers
Fireman’s Fund’s Certified Green Building coverage protects owners of existing
green buildings for their green systems. It also features upgrades coverage for
owners of buildings that are not currently green.
“We’ll replace a building as a certified green building and pay the costs for a
commissioning engineer to monitor all elements of construction as well as pay
for the LEED certification,” said Bushnell.
Should a property loss be incurred on a traditionally constructed building, the
insured is covered to make upgraded repairs that meet green qualifications. And,
in the event of a total loss, Fireman’s Fund will pay to reconstruct the building
as a certified green structure.
The Certified Green Building Commissioning coverage feature pays the cost to
hire a commissioning engineer to oversee green repairs to ensure that all of the
building’s systems are operating at peak performance and in concert with one
USGBC View of Green Coverage
“Fireman’s Fund is changing the world with its belief in and support of green
building. Its investment in and contributions to green building opens the door for
great improvement and makes a strong statement for those sitting on the fence,”
said USGBC President Fedrizzi.
“Fireman’s Fund should be very proud of its coverage that allows upgrades that
make damaged buildings greener than they were before,” he added.
“The biggest success has been perfectly timing a product launch that embodies
the synergy between Fireman’s Fund’s business strategy and corporate values,”
“Our green offering is innovative, a clear differentiator, and geared toward the
value buyer, and it demonstrates Fireman’s Fund is an inspired and caring
company with a commitment for social responsibility. The timing is perfect, as
the green building movement reached a tipping point just as our product was
released,” he added.
“Green buildings have become mainstream within the past year, with a
compelling economic value proposition for all involved — developers, owners
and occupants of both commercial and residential buildings, regardless of the
type of business or geographic location,” said Cohen.
“Building green environments is not cheap at Fireman’s Fund or anywhere
else,” said John Vallor. “We must take care to analyze energy reduction and
environmental projects to ensure that we understand both the benefits and the
costs and that we can make a case to Fireman’s Fund that such projects are good
for both the environment and for our business.”
“Fireman’s Fund monitors expense ratio very closely,” said Dean Selna. “Being
that we have a 20-plus-year-old Home Office facility, all the building
modification and enhancement related to sustainability come with a cost.
Because of this, we work closely with our different lines of business and
Executive Committee to demonstrate the value.”
“It is critical to demonstrate a deep commitment to sustainability and green if we
are to be taken seriously by the green movement,” said Bushnell.
“Greenwashing — making your efforts seem green when, actually they’re
superficial at best — is common and effectively destroys a pretender’s
reputation. Walking the talk is critical. If we don’t pay attention to the value
proposition we espouse we will not be taken seriously.”
Educating Agents on Green
“The biggest challenge is educating agents and customers,” said David Cohen.
“For example, an agent recently stated that he recognized the value of our
Certified Green Building Coverages Forms for buildings that were already
LEED or Green-Globe certified, but he didn’t feel the same about our Green
Real and Personal Property Upgrade Coverage Form. ‘After all, we wouldn’t be
helping the policyholder become green until after a loss — and wouldn’t the
insured be protected by law and ordinance coverage?’”
Cohen acknowledged that law and ordinance coverage might provide some
protection, given that green is starting to be incorporated into building codes.
“However, I pointed out that our coverage in many ways goes well beyond
compliance with building codes,” said Cohen. “We rebuild to the latest LEED
standards in place at the time of loss, not those in place whenever the building
code was enacted. The insured thus benefits from the most current thinking on
energy and water efficient buildings and low VOC-emitting interiors.”
Not only does Fireman’s Fund pay up to $25,000 for a LEED Accredited
Professional to provide design services but $25,000 for flushing out
reconstructed space with 100 percent outside air and new filtration media. If the
building is a total loss, it’s rebuilt as a LEED-certified building and Fireman’s
Fund pays up to $25,000 for certification fees.
“Also, before a loss occurs, the insured can take advantage of the information,
tools and discounted vendor solutions available on our iCustomer Green
Resource Center,” said Cohen. “This agent came away with the knowledge
needed to sell our Green Upgrade form.”
What’s Ahead This Year
“Working on the green initiative has been one of the most satisfying experiences
of my business life,” said Bushnell. “I’ve been able to combine my insurance
expertise with the passion to do the right thing to benefit the Company, our
employees, our customers and the environment. I see the next year as one of
green and growth.”
“Within a year, I expect to see more green features incorporated into Fireman’s
Fund facilities, following the example of our San Marin campus in Novato
where we’ve recently installed automatic sinks, toilets and low VOC carpeting,”
“I expect greater employee awareness of the climate change issue and what
Fireman’s Fund and Allianz are doing to combat its expected effects. And I
anticipate great success on the business side, as our commercial product is
generating enormous buzz in both the green and Real Estate communities. And,
our personal product should soon be available in key states such as California,”
“In a year, at least one of our major enterprise offices will be at or near basic
LEEDS certification levels and we will be working on a second major green
building in our portfolio,” said Vallor.
“I see increased participation in our national waste management and recycling
program to be more in-line with the Home Office diversion rate,” added Selna.
“Over the next year there should be a base level of commitment and the
beginning of measuring environmental impact based upon sustainability metrics
that many companies use,” said GCO’s Barnard-Bahn.
Five-Year Green Outlook
“Fireman’s Fund and Allianz will reinforce our position as a green thought and
action leader over the next five years,” said Bushnell. “We will continue to
develop new green coverages, green risk management programs and green
facilities. We will be influential in the green community, influencing standards
and requirements. We will reap the economic and environmental benefits of
green and grow our core insurance business.”
“These trends will be exponentially greater in five years,” explained Cohen. “I
expect green features will be incorporated into all Allianz of America facilities,
several of which will be LEED-certified. I anticipate Allianz of America will
have a double-digit decrease in greenhouse gas emissions, through greening its
facilities, more effectively managing travel and purchasing offset credits.
“I also expect us to be the green insurance market of choice, for all types of
customers we wish to write — and with tremendous demand for our product,”
said Cohen. “It will be widely recognized that traditional buildings are rapidly
becoming obsolete, as green building standards will be incorporated into
building codes nationwide in most municipalities and states.”
“Upgraded building management systems should further reduce energy and
natural resource consumption within five years,” said Selna.
“Increased expectations and standards and environmental impact will likely be
considered a natural part of what it means to do business ethically,” added
Mixing Green With Business
“Green has become ingrained in our corporate culture and values. This has the
external benefit of demonstrating that we are not just greenwashing,” said
Cohen. “From a business perspective, this should improve our brand image and
attract green customers.
“There is also the internal benefit of supporting Allianz’s Sustainable
Development initiative. Along with reducing Fireman’s Fund’s own greenhouse
gas emissions, we can contribute to Allianz’s global efforts to combat the effects
of climate change,” added Cohen.
“Our green building insurance offering is the best received insurance product
I’ve ever seen, both internally and externally. It appeals to everyone, whether
you come at from an environmental/social responsibility viewpoint or from a
business-driven, economic approach,” said Cohen.
Bushnell agrees. “Employees are energized to offer a product that so clearly
benefits the communities in which we work and live. And there has been an
immediate positive response from the customers we are seeking to attract, as the
green community has been looking for validation from a financial services
provider such as Fireman’s Fund that, yes, there is a compelling economic value
proposition to building green.”
“Never before have I heard of a policyholder volunteering to provide a public
testimonial for an insurance company as soon as they heard of our product,”
added Cohen. “But it happened with our green offering within the first month
that it was available. Green has changed our business and the way we all view
the world at Fireman’s Fund.”