Sound Policy podcast: What manufacturers need now to build resilience

Brian 
Welcome to Sound Policy from FM. Manufacturing makes modern life possible. From the comforts we love to the products we rely on, they reach us by way of factory floors and production lines around the globe. But this industry is also facing a growing set of challenges, from trade disruptions to equipment breakdown to the age-old risk of fire. 

So, what do manufacturers need these days? What's driving their losses and how can those losses possibly be prevented? On this episode of Sound Policy, we spoke to James Gieger, New York operations manager for FM, to help break it down.  

James, welcome. Thanks for being on the show. 

James 
Thanks, Brian. Happy to be here. 

Brian 
First, can you introduce yourself, talk a little bit about the work you do? 

James 
I'm currently the New York operations manager, and I'm also heading up the proof of concept for our new Essential product in the United States. 

Brian 
Now, we are sitting here in your office here in Parsippany, New Jersey. Can you talk a little bit about your background? You're a Jersey guy. Can you talk a little bit about your background and what brought you to FM? 

James 
For starters, I was a finance major, ended up falling into insurance, like most people do in this industry; but really found a home full of great people. And a lot of these folks have interesting backgrounds, so it's certainly fun to get to know people, you know, from all different walks of life. And then I started off, out of school, working for a competitor of ours. I did that for a few years before joining a brokerage firm who we currently do business with right now. And that was about five years of my career. And then I've been happy to be able to spend the last 15 plus years working with FM in a variety of different roles. 

Brian 
We're here to talk about manufacturing in particular. Why are those an important part of everything that we see in the world? 

James 
Manufacturers are essentially the backbone of society in, in general. Everything you use day in and day out for general convenience or stuff in your home or apartment is all done through a variety of different manufacturers, some of which you've never even heard of. And so, that particular space is even more interesting once you start to dive into it. 

Brian 
It's obviously a pretty big industry. It's facing some changes, some challenges, some big opportunities right now, too. What sorts of manufacturers do you work with here at FM, and how do you work with those manufacturers? 

James 
Yeah, I've actually, I've had the pleasure to work with, a variety of different manufacturing companies in my career so far. Everything from large Fortune 500 organizations with, you know, really complex global, you know, schedules of locations and facilities, down to single- to maybe two- or three-location-type sized accounts, that really kind of service a whole variety of industries: aerospace, defense, consumer goods, electronic components, the automotive industry. Really anything that you can think of, we've we've been, had some exposure here at FM. 

Brian 
What do they need right now? 

James 
Well, it's a, it's a very good question. The industry is definitely faced with a lot of challenges. Things around supply chain, certainly something that comes to mind. Aging infrastructure around, around the world, is certainly another component, finding quality workforce, folks that are want to enter into that, into that space and support that industry long term. So, collectively, there's a number of different factors that they're facing. And, and I would say on the smaller side of things, for the smaller manufacturing companies, they are facing even more constraints because they don't necessarily have that large global infrastructure that some of our Fortune 500 clients might have. 

Brian 
Let's take those in turn. Supply chain. What are the supply chain issues going on right now? And has that gotten, has that gotten particularly acute in the, even the last couple of years? 

James 
I would say with supply chain, a couple of things that come to mind are unpredictable lead times. That certainly being one. I would also say some of the smaller to mid-size organizations are struggling to carry excess inventory due to cash flow constraints. And lastly, just the geopolitical environment itself, mainly around tariffs, is, is causing a big concern for our clients. 

Brian 
Lot of uncertainty around tariffs. 

James 
Lot of uncertainty for sure. 

Brian 
What sort of challenges do you see manufacturing clients facing today versus just a few years ago? It feels like the change of pace has really been accelerating for these sorts of clients. 

James 
Yeah, I would say the, that all industries are really faced with a rapidly changing environment. That's no different from our folks in the manufacturing space, to particularly around the automation side of things. There's a huge demand to become more automated. And that pace of change is, is stressful for a lot of different folks. They're challenged with trying to be, become more efficient, but also not make mistakes, because downtime can be very costly. 

Brian 
What sorts of mistakes could you make if you're automating without really fully thinking through those consequences? 

James 
As an example, you might have a client that goes from two manufacturing sites that have redundancy for each other down to one site that's, you know, more automated, more efficient. And while that is initially a great thing from a cash flow perspective, it could present some exposures because now you don't have the redundancy that you may have had before. 

Brian 
There's also a lot of lithium-ion batteries, too, in those automated systems. Is that  something you hear a lot from clients as they automate, that lithium-ion battery challenge? 

James 
Absolutely. Lithium-ion batteries are extremely hard to protect against if they were to catch on fire. But really, power storage in general is something that every client is is, managing right now. And certainly in the automation side of things requires more power, and that's an exposure that that's certainly presented at their sites now. 

Brian 
What does an automated site look like? Walk me through what an automated site looks like versus when you first started 15 years ago, how that would have looked a little bit different. 

James 
I would say 15 years ago, when you showed up at a manufacturing site, you were greeted by somebody who's probably been there their their entire life, maybe even a multi-generation, type of situation where their father or grandfather might have worked at a site. And nowadays, you're kind of greeted by somebody more senior because there's less people at these sites. There's more people focused on managing the computer equipment that supports all the operation, versus in the past, where you might have had somebody that's more focused on the machinery and equipment that would have more experience, understand that maybe what has happened at that site throughout the years, so they’ve got the history about what's been going on at that location. So, definitely is a different visit, and the exposures are different. And that's most importantly what we're there for, is to help them understand what exposures are present and help them obviously mitigate it. 

Brian 
That actually brings us to another one of those three points that you raised, which is that workforce challenge. Talk about that. What are what are clients facing with the with the workforce challenges right now? 

James 
Yeah, I would say that, again, cost is certainly one thing. So, headcount is extremely precious. But it's not only headcount challenges; it's experience is literally walking out the door. We're seeing this across a variety of different industries. But in the manufacturing space particularly, we're seeing a changing of skill that's needed at these sites. It's a, it's a mix of mechanical skills, but also digital skills as well, because a lot of this equipment is being operated more autonomously, but also through computers. You know, and this actually, you know, brings up, an interesting point is that a lot of the aging workforce that is leaving those industries, they know the equipment by feel. They know it because they've been working on it for 25, 30, 40 years. And that type of experience is, is invaluable. 

Brian 
And the other point that we were talking about is, is aging infrastructure, aging machinery, those sorts of things. What are, what are clients working through there? 

James 
Yeah, I think it's a, it's a very similar circumstance is that, you know, you have older switchgear, older equipment, lack of the ability to get replacement parts for some of these legacy pieces of equipment, ability to be able to have cash flow to secure backup parts, and things of that nature. Old, tired roofs, tired suppression systems, or a suppression system that you might have installed in your site to protect against what was done 25 years ago, when now you're doing something different in the site, that suppression system might actually not be, as adequate as you might need right now, too. 

Brian 
It seems like those challenges are also kind of interrelated, too, right? The supply chain that you need, if you need to replace this aging machinery, those challenges are going to sort of amplify each other. 

James 
Absolutely. They're linked together for sure. 

Brian 
What do you see as the root cause of the supply chain issues that manufacturers are facing right now? And what do those mean for clients? 

James 
The root cause of the supply chain issues that our manufacturing clients are facing is first and foremost, it affects everyone along the entire supply chain. So, any time there is a hiccup at any point in that, upstream or downstream, everybody's getting affected. And I would say small- to midsize organizations feel it even more so. 

Brian 
Yeah. It also seems like we're talking about the supply chain, but manufacturers are a part of the supply chain themselves. There potentially might need to get supplies downstream and send them upstream as well. Is that, does that have business interruption implications for clients too, not just the supplies that they need, but the clients that depend on them? 

James 
Absolutely. It certainly has revenue impacts. It also has, you know, reputational impacts. 

Brian 
Which you can’t insure against. You can’t insure against your reputation. 

James 
Yeah, you can’t insure against brand reputation. But when you're not able to deliver, you know, folks find a way to go someplace else. And being able to retain those clients for the long term or, you know, satisfy contract requirements makes it extremely difficult. 

Brian 
We've been talking a lot about the challenges that that manufacturing clients are facing. But what does resilience look like for them? When you're walking through a facility, manufacturing facility, that looks best in class, walk me through what that actually looks like and what you're seeing in a facility like that. 

James 
Yeah, I think first and foremost, it would start with the people. Having a team show up and walk around with our field engineers on site and seeing them all be on the same page. That's where it really starts. And that's partly because they've planned ahead. They've clearly taken resilience seriously. They know what their exposures are. They know where things might go wrong, and they have plans in place to be able to address them. Not every client can protect against every exposure that's out there. And there is some inherent exposures that exist that some of our manufacturing occupants use, depending on what they actually do. So, I’d say first and foremost, it starts with the people. 

Brian 
What is the manufacturing risk that keeps you up at night that you're really concerned about for your clients? 

James 
I would say the number one concern that I would have for my manufacturing clients specifically would be any sort of damage to critical pieces of equipment. We find clients struggling to replace equipment that takes what at one point maybe have been a month to replace, now it takes six. That's a big impact to their ability to be able to fulfill contracts and get back up and running and made whole, ultimately. So, anything around critical equipment, I would say is, is what would make me stay up at night. 

Brian 
Was there a time that really crystallized for you why these businesses are such a crucial part of their communities? 

James 
I would say, in preparation for launching our Essential proof of concept, I did do a little research as to what the manufacturing space looked like, mainly in the U.S., because that's what I was going to be responsible for. And right now, there's about 700,000 manufacturing companies that are here in the U.S. If you ask somebody to name them right now off the top of your head, maybe you get a dozen or so, two dozen of the household names. But, you know, of those 700,000 manufacturing clients, 98% of them would be considered smaller manufacturing clients. So, the majority of the manufacturing space is filled with companies that most people have never heard of. But the people that are employed by those companies are, you know, folks that are living in places that maybe you've never heard of. But they're, that company is a crucial part to the infrastructure of the town they live in and their families and, and obviously, their livelihood. So, when you start thinking about how many organizations are out there that we've never heard of, that are in places that you've never heard of, that are supporting these families all across the U.S., really makes you realize how important these organizations are to the United States in general. 

Brian 
And what, and what do they need? They need resilience, right? I mean, what sorts of things do they need right now? 

James 
Well, these organizations are smaller by nature, so they have less resources. They have less locations, less redundancy in their businesses. And they're looking for advice. They want to be more resilient organizations. They want to protect the livelihood of their employees. A lot of these small organizations still have that great mom and dad pop-feel type to them. And these organizations want to take care of their people and their community locally. And there's a great way that we can help out there. 

Brian 
What is FM Essential going to mean for those sorts of businesses? 

James 
Well, what we found when we launched the proof of concept is that the, these organizations were getting some advice but weren't necessarily getting the best help and wasn't really helping them become as resilient of an organization as they wanted to be. So, we're able to not only become their partner on the transfer of risk so that we can insure them and provide them with coverage that's appropriate for their organization, but we're also able to deploy our suite of engineering resources, which includes research, obviously, our entire field staff, all the expertise that goes up throughout the organization in a way to help them become more resilient and obviously, you know, fulfill their purpose in life and what they're trying to do. 

Brian 
What do you think of automation? When you're seeing one of these automated factories, what goes through your mind? 

James 
I personally think it's fascinating. While there certainly could be other exposures that are introduced into these organizations’ facilities, it also is creating new jobs and it's also the future. If we look back at what manufacturing was 100 years ago, it was vastly different than what it is today. So, progress is a great thing. And, you know, seeing it firsthand has been a great experience. 

Brian 
You said it starts with the people. How is that gonna change if there are fewer people actually on the factory floor, as things get more and more automated? What sort of challenges are you trying to think through there, in this, in this changing environment for manufacturers? 

James 
Yeah, as, as our clients are seeing less folks, you know, at their facilities and more reliant on, on equipment, I actually look at it as an opportunity for FM to add value to their organizations. It's, it will be ever more important to have a close relationship with their field engineer that's, that's visiting their, their site. And the resources that we have at our disposal to be able to help them continue to be resilient organizations is something that I think most of our clients are gonna want to tap into, even more so now than ever. 

Brian 
I think of the example of the factory of the future that doesn't have lights on, but and also doesn't have a human-shaped doorway because you don't, you know, the robots don't need to use the, you know, seven foot doorway because they're, you could be shaped any way they want. Are you already seeing that? Have you seen that in the real world? 

James 
Very little fully automated facilities like that. I could, I could, I could see where you're coming from though. Like, do they even have bathrooms at these facilities anymore, right? No, it's certainly, you know, we’ve, we've seen them on, on TV. Maybe you saw them as you're scrolling through social media, so that they are a thing of the future. They are coming. And they'll be here before you know it, but it's not as widespread currently as maybe we would think.  

Brian 
There’s going to be some new protection challenges for those bathroom-less, lightless, door-frameless places, right? 

James 
Absolutely. They'll they'll certainly be that. One of the things we'd like to talk about is human element exposures. And they're, you know, on one hand, the response of somebody could help mitigate an exposure and help, hopefully, maybe keep a loss smaller than it, than it could be. On the other hand, humans sometimes also create loss by accident as well. And so, there's an interesting way of looking at it. There's probably a little push-pull there with those facilities. 

Brian 
Yeah. Robot element exposure does not have the same ring to it as human element exposure. 

James 
Exactly. 

Brian 
So, FM Essential. You've been working on this. Tell us a little bit about it. What is FM Essential? What have you been working on? 

James 
Yeah, FM Essential is our most recent product that we've launched, and the purpose of it is to target manufacturing occupancies. Could be small, could be large, could be mid-sized organizations that are looking for a little help on the resiliency side. They want to become more resilient organization. They're looking for people to help them out in getting there. But maybe they currently aren’t in a place that is highly protected. So, these are folks that are looking to go on a journey with us, and we're looking to be able to deploy our engineering expertise to help them on that journey. 

Brian 
Why manufacturers in particular? What are the challenges that they're facing that this product really helps serve? 

James 
Manufacturing clients are the backbone of, of everything that people use every day. Manufacturing clients that we work with work in aviation, aerospace, consumer products, everyone's cell phone, all the electrical components that go in it. And so, these are the organizations that need our help. These are the organizations that probably are the most vulnerable, not just to themselves, but also to our larger community. And so it's a great place for us to start. And so, we feel that it's a place that our engineering expertise can add the most value. 

Brian 
This is going to be a brokered product. How do you work with brokers to help them work with their clients? 

James 
Yeah. We'll start, I actually used to work at a brokerage firm, one that we partner with today for the Essential product currently. So having that background of five years of working with them, I understand what their day-to-day job is like. And, and quite frankly, that helps us better position how we can service them. 

Brian 
What were clients and brokers telling you that they needed? How did that play into the decision to launch this product and some of how it was designed? 

James 
Some of the feedback that we got when initially launching this product was the clients’ needs around becoming more resilient. A lot of what our broker colleagues were telling us was that they were receiving some general engineering information, but that's where it really would stop. And at FM, we're able to take that much further. So, this product was built around finding ways to help clients become more resilient, but also while protecting the actual mutual organization. We wanted to make sure we were offering a product that was market competitive, becoming a resource for these manufacturing clients in this space, and the ones that want to become more resilient. 

Brian 
As you work with these clients, is there any possibility that they could get into the mutual? 

James 
Absolutely. In this, the first year of the POC, we probably have maybe three or four that are targeted to becoming, insured through the mutual within a short couple of years. It really depends on how fast they're able to ramp up on the risk improvement efforts and get their locations to be, you know, where they need to be as part of the mutual. 

Brian 
You call that a resilience journey. That journey could end at the mutual. It could stay in Essential, but really trying to meet clients where they are. 

James 
That resilience journey is different for every manufacturing client, and some are able to do it faster than others. The point being, the Essential product allows us to start working with them today rather than waiting till that resilience journey comes to a point where they can be insured through the mutual. 

Brian 
What are the big resilience challenges for clients specifically in Essential? What sorts of things are you working with to bring them on that resilience journey? Is it fire risk? Is it, you know, natural hazards? What, what are some of the big beats you're seeing? 

James 
Really, all of the above. A lot of the manufacturing is, is done in the Central United States here. They are exposed to all the natural hazards. What we're seeing that's becoming more of a loss driver is severe hailstorms and convective storms. That's gonna be a large portion of our nat cat losses in the last couple of years than ever before. But that's where they're located, and that's the exposure that they have. And with these manufacturing occupancies comes inherent exposures, such as ignitable liquid storage, sprinkler systems needing to be installed. Inventory storage is another one, for example. How high they're storing it, what they store it in, whether it's in a cardboard box or in a plastic container. Does it have a lid on it? These are all things that are, are small things that could add to really big loss expectancies, but also are ones that can be easily fixed. 

Brian 
You know, what is the payoff for a resilience journey? Where are they going to end up? 

James 
Well, these, these organizations have staff. They have communities that they support. They have a purpose in general, right. Every organization's going to have something that drives them to get up every day. And by becoming a more resilient organization, we're helping these organizations do that. And we're doing that not only to help them fulfill their purpose, but we're doing so by providing the best advice we could possibly give while also offering a risk transfer solution. 

Brian 
What do you think FM Essential is going to look like? Crystal ball, two-to-five years. What does that Essential look like if, if, if it's really successful in James Gieger’s eyes? 

James 
I would say in two-to-five years, what I would define as success is, is continued steady growth, continuing to find aligned clients, continuing to be able to help these organizations become more resilient. I'd love to be able to see a few of the Essential clients moving into the mutual and their resilience journey jumping to a whole new level.  

Brian 
Was there a market hole here? Like, what was missing in this market that you're trying to fill? What problem in the market or gap in the market were you trying to solve with FM Essential?  

James 
The gap we were trying to fill was being able to bring resilience to more organizations. 

Brian 
What are brokers telling you about what they need for their manufacturing clients right now? 

James 
By nature of manufacturing occupancies, there are some exposures out there that, quite frankly, not everybody understands. What our brokers are telling us that their clients needs are someone who understands them, understands their business. I think they really just want to be treated fairly in the marketplace. And by us being able to visit their sites and understand their businesses, what their needs and what’s driving them, we can actually understand them better, hopefully offer a competitive insurance offering, but also help them be a more resilient organization through our engineering. 

Brian 
When you're at a party saying, I work for FM. I'm launching this new product. We're focusing on manufacturers. And you're, and then the person you're at the party with asks you about it. What is something that often surprises people like that? Just every, everyday folks out there? 

James 
The intricacies of how complex a supply chain is, is probably the thing that most people don't understand. When they look at their phone, they think somebody is manufacturing their phone, and they don't think about the 50 other companies that had a piece into making it, and the other company that made the case, and somebody else who made the cable for your charger, and somebody else who made the actual charger, and somebody else who made other components as part of that charger. And so that's probably the biggest thing that people's jaw hit the floor on, when you start talking about the complexities of supply chain. 

Brian 
Nevermind the person who made the data center that allows all this to happen, right? 

James 
Correct. 

Brian 
What is the, the ROI of resilience? It's not just about avoiding loss. What does, what do people get if they take steps to become more resilient? 

James 
There are things like brand reputation out there that aren't insurable. The ability to be able to complete orders and honor contracts and maintain long-term relationships means that their facilities will be up and running. And that's part of the resilience journey, is making sure that those facilities stay up and running so that they can continue to do what they need to do. 

Brian 
Yeah, you don't hear about that obscure manufacturer making that obscure product until they have a problem, in which case, all of a sudden there's a big supply chain issue that everybody's hearing about on the news. 

James 
Absolutely. 

Brian 
When this is released, we will be at RISKWORLD and talking more broadly about this going into new territories. But it was piloted here in New York in addition to in India and France. Was there a moment when you sort of said to yourself, this is going to work, that this is going to be successful, and this proof of concept is going to be more than just a proof of concept, and it's going to go other places. 

James 
I would say absolutely. Within the first couple of months of launching this product and getting out and talking to brokers about it, meeting with our, our prospective clients, and then then actually partnering with those clients and hearing their appreciation and loving the process, appreciating the product that we're offering, but more importantly, the advice that we were giving them and how we're trying to support them. Seeing that, the first couple of times, I knew we had had a winner here, and really excited to be able to talk about this more as we go into RIMS 2026. 

Brian 
So if people are at RISKWORLD in May of 2026, they're listening to this right now; if they want to learn more, what should they do? 

James 
Well, we're really excited during RIMS of 2026 that we're going to be launching this product more broadly there. There'll be a lot of information at our booth, 901, and of course, you could always reach out to me directly. 

Brian 
See you in Philly. 

James 
See you in Philly.