Byrne Named Chairman of Fireman’s Fund

American Express said Tuesday that insurance executive John J. Byrne has been tapped as chairman and chief executive of Fireman’s Fund Corp., the holding company for American Express’ insurance operations.

Byrne will succeed Sanford I. Weill, who is resigning as president of American Express and as chairman and chief executive of Fireman’s Fund Corp. Weill’s resignation, which was announced in June, is effective Aug. 1. Byrne’s nomination will be taken up by Fireman’s board of directors at its Aug. 7 meeting.

William M. McCormick will continue as chairman and chief executive of Fireman’s Fund Insurance Co., Fireman’s Fund Corp.’s primary subsidiary based in Novato, Calif.

Byrne, 53, has been chairman and chief executive of GEICO Corp. since 1976. Byrne is credited with rebuilding the Washington-based automobile and homeowners insurance company after heavy losses in the early 1970s.

“Jack Byrne has established himself as one of the truly outstanding leaders in the insurance industry and his record speaks for itself,” James D. Robinson III, American Express chairman and chief executive, said in a statement. “He brings to Fireman’s Fund, at an important juncture in its history, a unique combination of experience, energy and vision.”

Weill’s resignation--a parting described as amicable by Robinson--was announced on the same day as a proposed reorganization of troubled Fireman’s Fund and a planned public offering of an undisclosed amount of Fireman’s Fund shares.

Under the proposed reorganization, American Express will absorb Fireman’s life insurance business while the property-casualty business will be operated as a public company.

American Express reported separately Tuesday that its insurance subsidiaries had a net loss of $72 million in the second quarter, compared to net income of $8.3 million in the same quarter last year, because of a strengthening of loss-expense and loss reserves for 1983 and earlier years. Without such reserve strengthening, the property-liability operations would have had a $16-million profit on top of the $13-million profit actually recorded by Fireman’s life insurance operations.

The loss reflects problems from business written in earlier years, analysts said, and Fireman’s Fund is recovering from significant pretax losses in 1983 and 1984 following an 18-month overhaul by Weill and McCormick.

“The whole (insurance) industry environment is improving dramatically” and Fireman’s has improved its policy pricing so that “over the next few years they will have significant earnings improvement,” said G. Alan Zimmermann, an analyst with Kidder, Peabody & Co. “I think Fireman’s Fund getting an experienced executive like Jack Byrne is great, and it enhances their prospects.”