27 April 2017Re/insurance

The fire in the night

When the first wisps of smoke were reported from the vicinity of tourist shop Onion Jacks on Hamilton’s Front Street on 21 July 2016, few might not have been very alarmed. That changed rapidly as it became very clear that the wooden building was well alight and that the Bermuda Fire and Rescue Service was mobilising to not just fight the fire but also to stop it from spreading.

For the staff of insurer Freisenbruch-Meyer Group news of the fire came in an initial series of phone calls before dawn. They were told the building affected was next door to theirs—and in imminent danger of also catching fire.

According to Michael Freisenbruch, president and CEO of Freisenbruch-Meyer Group, the news of the fire was a shock. “It was a very surreal moment when I got the call about the large fire on Front Street, in the vicinity of our flagship building,” he recalls.

“After that immediate shock, your next concern goes to people. Was anyone in the building at the time of the fire? Was anyone hurt or badly injured?”

Fortunately no-one was hurt, but the fire took hours to bring under control, with up to 60 firemen from the BFRS as well as other first responders battling the blaze. It ended with a very badly damaged building—but the fire had not spread beyond the adjacent buildings.

However, that isn’t to say that the buildings on either side of the primary building hadn’t been affected. “Until you’ve seen a major fire you just have no idea the destruction these things cause,” explains William Madeiros, EVP of Freisenbruch-Meyer Group.

“I’ve been in the insurance industry for a long time and I’ve seen some large fires—this one was definitely up there. We have three floors and because of the heat, fire, smoke and water the top floor of our building had to be gutted.

“The fire burned through an area of our roof and we lost all the windows on the side of the building that faced the fire. Our building was filled with water, smoke and soot. If we had to rate it, the top floor was 90 percent damaged, the middle floor 60 percent and the ground floor about 20 percent.”

For staff at the insurer the damage had a certain note of irony—the company offers commercial property and business interruption insurance for events such as this. “We encourage our clients to have disaster recovery plans, we never expected to have to test our own,” says Michael Freisenbruch.

He continued, “In our case what was pivotal was that we had a disaster recovery plan (DRP) which we executed immediately, led by Graham Hillier, our Chief Underwriting Officer.”

“We lost furniture, tables, chairs and computers, but the one thing we didn’t lose and that wasn’t in any way damaged or in danger was our client data.

“There is an important business lesson here: furniture can be replaced, but data is the critical component and having access to crucial data immediately following the loss is what put us back in business so soon.”

Back to work

The fire was in the early morning hours of July 21 but thanks to Freisenbruch-Meyer Group’s DRP it was able to service its first client on July 22, the next day, at 9:01am. According to Freisenbruch for the company that short time period was of the utmost importance.

“We know people have to insure their cars, boats and homes and that can’t wait. We were open the next morning thanks to Applied Computer Technologies (ACT), our IT partners, who were critical in the safe recovery of our data. And also insurer Chubb Bermuda, who were just a fantastic support. We couldn’t ask for better partners to put us back in business.”

“I got to see my work space for about 15 to 20 seconds,” says Troy Richardson, assistant vice president, personal insurance, at Freisenbruch-Meyer.

“I didn’t care about my desk or any of my belongings. I turned around and said ‘what are we here for again? Let’s do what we came here to do’. It was never about me or my space.

“It was just about getting us back on our feet and back to our clients because you know that’s what we’re in business for—to service our clients. It’s times like these that they need us the most.

“An incident like this is up there with a hurricane. When everyone else is hunkering down—that’s when we are coming out.”

Although the client data were intact and the company could service its clients, there was still a lot of clearing up to do—and that was when some of the more unexpected elements of the damage became apparent. Although the building had been saved, it came at a cost.

Stick to the plan

According to Freisenbruch, the building suffered a mix of fire, smoke and water damage. One of the lessons the insurer learned, and is now passing on to its clients, is about the damage that can be caused in the process of extinguishing a blaze of that size.

The BFRS had to use salt water to fight the fire, and that creates salt steam, which corrodes everything metallic, requiring even more elements to be repaired, such as lighting, wiring and electrical systems.

The damage complicated the recovery—but the company went ahead anyway, confident in its DRP. Freisenbruch-Meyer Group was originally told that it wouldn’t be occupying its building for three or four months, but the insurer told the contractors that wouldn’t work and that it had to be back in its home earlier than that.

“Our focus was making the customer service space of our business ready as soon as possible and we were able to move back in seven weeks following the loss, almost to the day. The last of the damage was repaired in March this year,” says Freisenbruch.

As he points out, the company was able to apply its knowledge of disaster recovery very practically on July 21—and is now able to pass that knowledge on to its clients. As a leading insurer in Bermuda, it insures some of the Island’s largest commercial enterprises and now, as part of their renewal process, Freisenbruch-Meyer Group is sharing its story with them.

Going through last summer’s fire has made Freisenbruch-Meyer Group  a better insurer for its clients.

“One of the key points we pass on is the importance of having the coverage and amounts of insurance in place to protect your business,” Freisenbruch stresses.

“Everyone joked and teased after the fire by asking if we were insured? And of course the answer was yes! But on a serious note to others, the day after a fire isn’t the time to wonder ‘is my insurance up to date?’ or ‘am I fully insured?’. It’s odd to think of these things when all is going well but you owe it to yourself to plan for the worst.

“When you get that phone call at 5:30 one morning saying there’s been an emergency at the office, you never know  what to expect,  but when you have a  plan ready to follow  you  know who to call and what your first steps should be,” he says.

“We learned so many lessons from the fire. One of them is that when you have a DRP, you have to stick to it. We don’t mean follow it blindly, but stick to it as closely as possible because there’s a reason you designed it that way. That is also the reason it’s important to test it before you need it.

Freisenbruch-Meyer Group will finally be moving back into the third floor of its offices in April 2017.