LONDON, UK—FM Global, one of the world’s largest commercial and industrial property insurers, ended 2017 with 5 percent growth in gross premium to US$5.70 billion and 9.3 percent growth in policyholder surplus to US$13.03 billion.
The company posted a combined ratio of 129.9 due primarily to an unprecedented year of natural disasters as well as a planned US$415.2 million membership credit provided to policyholders. Despite the combined ratio, net income was US$254 million versus US$797 million in 2016, on account of a combination of favourable investment results and U.S. tax law changes.
Additionally, FM Global outperformed catastrophe model predictions due to its loss prevention engineering differential, and the company’s financial strength rating was recently affirmed at ‘AA’ by Fitch Ratings and ‘A+’ by A.M. Best and S&P Global with a stable outlook from all three rating agencies.
“Our capital base is stronger than ever, which is a testament to the strength and stability of a business model built for volatility,” said Thomas A. Lawson, chairman and chief executive officer, FM Global. “As a mutual company owned by our policyholders, we know our resilience reflects our clients’ resilience. This past year, our engineering advice and strong balance sheet helped many of our clients deal with potentially devastating disasters and weather such events with minimal disruption.”
Among the 2017 highlights:
- The company’s client retention rate increased to 97 percent with an average client tenure of 19 years.
- FM Global established a new insurance company in Luxembourg, FM Insurance Europe S.A., to continue delivering seamless insurance coverage to its policyholders throughout the European Economic Area (EEA).
- The company opened its new US$15 million, 27,000-square-foot (2,500-square-metre) innovative FM Global Learning Center in Norwood, Mass., USA.
- Construction continued on a new US$80 million, 125,000-square-foot (11,610-square-metre) loss prevention training and operations complex located in Singapore, which will open in early 2019 and be the first of its kind in Asia.
- The company issued its 10th membership credit—an approximate benefit of US$3.8 billion to clients since 2001.
- FM Global was named the “best insurer” for property and boiler and machinery insurance in National Underwriter magazine’s Risk Manager Choice Awards, and the “most highly regarded insurer” for property claims handling in Advisen’s 2017 claims satisfaction survey.
- Business Insurance magazine acknowledged FM Global with an Innovation Award for its global flood map.
- Forbes magazine ranked FM Global #112 on its list of “America’s Best Employers,” an increase of 163 places.
“In 2018, FM Global will continue to invest in research and technology that will speed the transfer of knowledge into client-focused loss prevention solutions,” added Lawson. “We also will open an Innovation Center to explore emerging technologies and how to leverage them to protect policyholders from loss. Additionally, we will continue to accelerate our time to market with new products and services that meet clients’ evolving property protection needs.”
About FM Global
Established nearly two centuries ago, FM Global’s capital, scientific research capability and engineering expertise are solely dedicated to property risk management and the resilience of its client-owners. These owners, who share the belief that the majority of property loss is preventable, represent many of the world’s largest organisations. They work with FM Global to better understand the hazards that can impact their business continuity in order to make cost-effective risk management decisions, combining property loss prevention with insurance protection.