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Commercial Property Insurer FM Global Reports 2011 Results

LONDON, UK – FM Global, one of the world’s largest business property insurers, announced today that it ended 2011 with US$5.1 billion of gross premium in force, an increase of 5.4 percent, and that net earned premium grew by 5.8 percent to US$3.4 billion.

The mutual insurance company posted a combined ratio of 121 percent, driven by the 20 large natural disasters of 2011, and policyholder surplus declined by 5.5 percent to US$6.9 billion. Net losses incurred from disasters in 2011 exceeded losses incurred in 2010 by more than US$1 billion.

"The events of 2011 reinforced the strength of our promise to policyholders: to be a stable market, provide unique services and respond quickly when they have a loss, with a focus on helping them to resume business operations as swiftly as possible,” said Shivan S. Subramaniam, FM Global chairman and chief executive officer. “Although the frequency and severity of the natural disaster losses were our highest on record, we didn’t find it necessary to modify our risk assessment and risk improvement practices at the policy level, or suggest a redesign of our reinsurance practices."

Among the company's 2011 highlights, FM Global:

  • Completed issuance of US$208 million in membership credit to policyholders—due, in large part, to policyholders' diligent loss prevention efforts. Since 2001, FM Global has reduced the premium charged to eligible policyholders by approximately US$1.7 billion through membership credit.
  • Had a 96 percent client retention rate, significantly higher than industry averages, the highest for FM Global in more than a decade and a solid indicator of the strength of the company's business approach to its policyholder owners.
  • Issued 70 percent of national policies prior to their effective dates—well above industry averages.
  • Launched an enhanced FM Global Advantage® policy which included new coverage and enhancements. The new form provides greater clarity, with additional wording confirming the company's underwriting position and longstanding loss-adjustment practices—all to improve contract certainty.
  • Unveiled the newest addition to its Centre for Property Risk Solutions: a 12,000 square-foot (1,115 square metres) laboratory called the "SimZone." This major training advancement allows the insurer's engineers to gain hands-on experience with the loss prevention and control systems they will encounter at our client facilities. The SimZone environment accelerates their learning and makes them more effective. The laboratory also enables the company to develop specifically targeted, video-based training programmes for use by clients.
  • Received industry recognition from notable third-parties:
  • Named "Best for Service" in Business Insurance magazine's Buyers Choice awards
  • Rated first choice for commercial property, business interruption and terrorism insurance in National Underwriter's Risk Manager Choice Awards
  • Named best in claims processing and customer service by Greenwich Associates, who also ranked the company number one for underwriting expertise.
  • Both A.M. Best and Fitch reaffirmed FM Global ratings at A+ and AA, respectively, which remain unchanged since 2007

As FM Global looks ahead to the coming year and beyond, Subramaniam said the company must continue to focus on seamlessly, compliantly and cost-effectively delivering its products and services to clients as they grow in areas where local risk management practices, codes and standards result in less resilient properties that can lead to a significantly higher risk profile.

Above all, Subramaniam said, "FM Global will continue to ensure that we continue to deliver market-leading products and services that resonate with our clients and meet their ever-evolving needs on a worldwide basis."

For more information, FM Global’s 2011 Annual Report can be viewed and downloaded on the company’s website at

About FM Global 
FM Global works with many of the world’s largest organisations to develop robust property insurance and engineering solutions to protect their business operations from fire, natural disasters and other types of property risk. In recent years, FM Global has been named “Best Property Insurer in the World” by Euromoney magazine, “Best Global Property Insurer” by Global Finance magazine and received the prestigious Queen’s Award for Enterprise. The company is rated A+ (Superior) by A.M. Best and AA (Very Strong) by Fitch Ratings. In the United Kingdom, FM Global is the communicative name for FM Insurance Company Limited, which is regulated by the Financial Services Authority.