ALLIANZ IN AMERICA
by Robert V. Nuccio
Allianz Enters the American Insurance Marketplace: 1976
After graduating from the Colorado School of Mines with a degree in civil engineering and hydrology, I went to work for a general agency on June 16, 1976. Shortly thereafter, I attended the Insurance Company of North America School for Agents at 1400 Arch Street in downtown Philadelphia. When I returned from insurance school, one of my first sales assignments was to meet Frank Raab. Frank was on the Board of Directors of our owned insurance company and the immediate past President of the Insurance Company of North America, also known as the INA. Back then, we had very close ties with the INA, as I now have with the Fireman’s Fund. John T. Garash was the INA Board of Directors Chairman and his son Jack, worked as a producer in our office. In addition, INA owned the California Union Insurance Company, also known as Cal Union. Hugh Sinclair, the president of Cal Union, provided us with the paper to write the first Insurance Agents and Real Estate Agents Errors and Omissions insurance policies within the United States back in the summer of 1962. At that time a $1,000,000 policy sold for a $35.00 annual premium.
Frank had recently been hired by Allianz AG of Munich, Germany to open The Allianz Insurance Company in the United States. Frank was appointed as the first President, at which time Allianz AG gave him a check for $25 million to kick start the U.S. operation. He incorporated the business, obtained the first Certificate of Authority from the State of California Department of Insurance and set up the first Allianz office in a trailer in Malibu Beach, California. There, Frank began the difficult and lengthy state by state licensing process for the rest of the country.
This is where I came into the Allianz picture. Frank needed a business insurance package for this new, German financed insurance company attempting to enter the North American marketplace. Naturally, I approached the INA and was able to place the first Office Package insurance policy issued to the Allianz Insurance Company by the INA for an annual premium of $835.00. Then, as Allianz opened offices throughout the country, these physical locations were added to the policy. I personally attended each official office opening. Eventually, the Allianz Insurance Company account became sizeable, and more importantly, profitable. Interestingly, an entire advertising campaign was developed specifically to teach us Americans the proper annunciation, as most folks tended to pronounce it “Alliance”. The Allianz blue based campaign featured a colorful parrot saying “ALL – EEE –ANZ”.
Frank leased the first official Allianz office at 6420 Wilshire Boulevard in Los Angeles, directly across the street from the eventual permanent Allianz Home Office. Frank then hired the second Allianz officer, Peter Salomonson, to serve as the Treasurer and Chief Financial Officer. Once Peter was on board, he became my primary point of contact. In those early days, Peter worked many hours each day, so many, in fact, that he ultimately lived in a motor home in the back parking lot. The first non-officer employee hired was an Executive Assistant known then as Jane Diball (now known as Jane Espisito). Jane still works for Allianz at the Burbank office to this day, which speaks well to Allianz as an employer. With 38 years of service, she is the most senior Allianz employee in America.
As Allianz grew, more offices were opened. When they opened the New York office to underwrite ocean marine risks, I travelled to New York to meet the team and add this new office to their office package insurance policy. Soon there were offices in Texas (Allianz of America), Illinois and other states, vastly growing the Allianz footprint in America. The account quickly grew from an annual premium of $835 to well over $300,000.
Eventually, Frank purchased the 5 story Edward L. Bean building located at 6435 Wilshire Boulevard as the Home Office. Surprisingly, I already insured that building through the INA. Allianz housed employees on the first, second and third floors, with the Home Office on the fifth floor. They leased the fourth floor to the German Consulate, but first it had to be upgraded with bulletproof glass and other high security amenities. Construction took almost a year and it was quite a challenge to convince the INA to continue to insure the building.
In addition to placing and maintaining the Allianz Insurance Company account, I had the opportunity to be one of the very first appointed agents and to write one of the very first programs insured by Allianz. The program was originally insured by the agency many years earlier in 1952. The carrier at that time was the Agricultural Insurance Company which had recently been purchased by the Great American Insurance Company. Most of the business was being non-renewed including the California PTA, which had a $4,000 annual premium. I was given a 60 day cancellation notice during which time the account would have to be placed with a new carrier. Ultimately, I was able to place the account with Allianz for a $216,435.16 annual premium. This highly profitable program continues to be insured to this day by the Fireman’s Fund. From a numbers standpoint, my attention to detail and “engineer’s approach” paid off. I was highly selective with the accounts that I wrote for Allianz, and for many years was their most profitable agent. Every year, I would make a trip to the Allianz Home Office in Munich, Germany were I would have lunch with Uve Hassen and others. It was a great symbiotic relationship and a lot of fun.
Allianz Enters the American Personal Lines Marketplace: 1981
The third President of the American based Allianz was Herbert Hansmeyer. He too was very interested in software development and artificial intelligence, so we had a lot in common. Profitable business made our relationship even stronger. In short, I gave Allianz nothing but super-profitable business year-after-year so they were very receptive to my ideas and suggestions and trusted me with new opportunities. This self-serving statement is, of course, leading up to something. Early in 1980, I had authored and developed a very unique Personal Umbrella product and was searching for a suitable market. The entire world knew that Allianz was the largest writer of personal lines in Europe and that Allianz did not write any personal lines within the United States. As familiar as I was with that fact, I still felt that Allianz was the best possibility, so I pitched it to the First Vice President, Al Nassar, who then pitched it to Herbert.
At first, Herbert was completely against it, mostly because Allianz did not write any personal lines business within the United States whatsoever and therefore, had no personal lines expertise, no personal lines staff and no personal lines reinsurance. Persistence usually pays, and I was not about to let those minor facts get in the way. Upon Al’s advice and prodding, Herbert finally agreed to a meeting regarding the subject. That was our deal. Herbert could say “no” anytime but then had to agree to a face to face meeting. So, I met with Herbert and Al to discuss the proposed personal umbrella. He told me that they couldn’t take the program, because they didn’t write personal lines and that Allianz didn’t have any reinsurance (treaty, facultative or otherwise) for personal lines business. I remember asking why Allianz did not write personal lines business within the U.S. and reminded Herbert that I’d always given him very profitable business. At that point in the conversation, Al said, “That is true, Herbert. I wish we had 100 agents just like Rob.” Herbert could argue no more and so he agreed to take my unique personal umbrella program. Eventually, the personal umbrella program reinsurance was set up through North American Reinsurance, whom was on the rest of the Allianz treaty book of business. For a brief time, I became the only agent authorized to write personal lines for the Allianz Insurance Company in America. My position was short lived as the program was soon to come to an end. Trouble was brewing between Allianz and North American Re and the reciprocal ownership agreement between Allianz and Munich Re was coming into play. Ultimately, Allianz and North American Re parted ways and the reinsurance was canceled. The baby went out with the bath water and my technical and beautiful unique personal umbrella program was cancelled and never revived. It was unfortunate, because it was a neat program which employed the use of artificial intelligence and neural network technology by the way of a very efficient mainframe computerized underwriting and rating system that I had built and which is still in use to this day. Yes, it is true. The Allianz Insurance Company in America was in the personal lines insurance business, if only for 30 day
s. We had sold only one policy.
Allianz Acquires The Fireman’s Fund: 1991
I remember one time back in the summer of 1976, I was walking along New Hampshire Avenue in the mid-Wilshire business district of Los Angeles, California. My Dad and I were on our way to lunch. There, on the corner of New Hampshire and 6th Street was the Fireman’s Fund building. My Dad pointed up to the beautiful red Fireman’s Fund fire hat sign and said to me, “Son, if you can get a company like that behind you, you can rule the seas”. I never forgot that. My Dad knew the insurance business and was the first person in the United States to write Errors and Omissions insurance for insurance agents and real estate agents back in the summer of 1962. I was only 14 years old, but I do remember discussions at the dinner table. The Fund, to which it was affectionately referred, was an old line property and casualty insurance company established just before the end of the United States Civil War in 1863. The Fund became well known during the 1906 San Francisco earthquake at which time many foreign insurance companies pulled out of the U.S. without paying their claims. Fireman’s Fund paid fifty cents on the dollar to many of the earthquake victims whose homes were insured by these fleeing foreign carriers.
Attempting to reach higher levels of penetration and recognition in America, Allianz AG of Germany acquired the Fireman’s Fund in 1991. It was tough, if not impossible, for an agent to obtain a franchise, which was and is to this day, considered to be extremely exclusive. Shortly after the acquisition in July of 1991, I received a phone call from my old friend Al Nassar, who was now working for the Fund and responsible for moving the standard commercial business from Allianz over to Fireman’s Fund. Al informed me that Herbert had been named President of the Fireman’s Fund and that they both wanted to offer me a franchise. Because we had done business for so many years while they were running Allianz, I was one of the first he called. When I quickly answered in the affirmative, Al instructed me to meet Mike Genaro at the Marriott in Woodland Hills at 9AM the next morning. I had never met Mike before and Al promised me it would not take long at all. When I showed up for breakfast, Mike said, “I don’t know who you are, but I’m not allowed to ask you any questions. I’m just supposed to have you sign this Agency Agreement and then buy you breakfast.” And so, that’s exactly what Mike did. It was a great breakfast and a triumphant day for me. This was my chance to “rule the seas” as my Dad had taught me. That breakfast marked the beginning of the R.V. Nuccio & Associates, Inc. and Fireman’s Fund relationship that continues to thrive today.
Rob Nuccio is the President of R.V. Nuccio & Associates, Inc. He has been in the insurance business for over 38 years and has authored many specialty insurance products. Through his computer technology company, Insurance Robotics Laboratories, Inc., Rob has created very special software using artificial intelligence and neural network technology. This software allows 24 hour insurance production without human intervention. R.V. Nuccio & Associates, Inc. is a boutique brokerage located in Toluca Lake, CA.