Our History

How Resilience Became a Business Practice

Back in 1835, property loss prevention was not a top-of-mind business issue. That is, if your business was hit by fire, flood or another natural hazard, you rebuilt and hoped for the best. Until a Rhode Island textile mill owner named Zachariah Allen came along.

Zachariah made property improvements to his mill to minimize the chance of fire loss and increase the mill’s resilience. After taking these steps, he asked his insurance company for a reduced premium. He was turned down.

What happened next changed everything.

Not one to settle for business as usual, Zachariah recruited other mill owners who shared his loss prevention philosophy. Together, they combined their strength to create a mutual property insurance company that would insure only “good risk” factories—creating the category of “highly protected risk (HPR) properties.” This business idea also provided incentives, because whatever premiums remained at the end of a policy term would be returned to policyholders.

Other companies joined the group, which became known as the Factory Mutuals. As Zachariah had predicted, proper fire prevention methods and inspections resulted in dramatically fewer losses. When the fire sprinkler was introduced in 1874, Factory Mutuals championed its acceptance. 

Over the next century, more companies looked to the Factory Mutuals System to minimize their property risk, with the knowledge that “the majority of property loss is preventable.” This smarter way, that is, of preventing loss before it happens, resonated with other industries, and more companies across the United States signed on. 

By 1987, 42 mutual companies joined forces to become three companies. This merger allowed the three carriers to provide clients more comprehensive coverage and loss prevention resources. Finally, in 1999, FM Global was created to offer even greater insurance capacity. Through all these years, we’ve consistently invested in research and engineering, ultimately opening the FM Global Research Campus in 2003. Today it is the world’s most sophisticated center for advancing the science of property loss prevention.