FM Global grows GWP to $4.7bn

Business property insurer FM Global announced today that it ended 2009 with a very strong underwriting performance, with client retention rates remaining at historically high levels and an investment portfolio return that outperformed industry benchmarks.

The mutual insurance company reported that, in 2009 gross premium in force grew by 5.6% to US$4.7 billion and net income was US$840 million.

Policyholder surplus grew 35 percent to US$6.3 billion,due to a combination of solid un­derwriting and investment results which marked a recovery to its position before the recent financial market upheaval.

Additionally, the company posted a profitable combined ratio of 69.6 percent, better than forecast, due in large part to the absence of large insured natural disaster losses and policyholders’risk improvement efforts. FM Global’s client (account) retention rate was 93 percent, significantly higher than industry averages.

Among the company’s 2009 highlights, FM Global:

• Expanded its longstanding presence in Brazil, and its presence in Malaysia, by licensing its reinsurance activities in those countries. The company also established an insurance company branch in Switzerland and began the process of establishing an insurance company branch in Spain.
• Delivered more than 90 percent of its clients’ master policies within 30 days of inception and more than 70 percent before the policy’s inception date—well above industry averages.
• Increased worldwide headcount by approximately four percent, due primarily to the expansion of FM Global’s global capabilities.
• Broadened the capability of its large-scale fire test laboratory at its Research Campus in West Glocester, R.I., USA and designed a new 72,000-square-foot (6,700-square-meter) natural hazards laboratory. The Research Campus is the world’s largest center for property loss prevention research.
• Scientifically quantified the relationship between sustainability and loss prevention as it relates to the carbon footprint of a commercial or indus­trial facility subjected to a fire loss. The findings revealed that buildings designed to be sustainable, and that also meet high property loss preven­tion standards, will leave a smaller carbon footprint over time.
• Was rated as the #1 “Risk Manager Choice” for commercial property and business interruption insurance, according to independent industry research conducted by Flaspöhler Research Group.

“FM Global’s focus today is as contemporary and relevant as when the company was founded in 1835—reinforcing the enduring nature of our business model,” said Shivan Subramaniam, FM Global chairman and chief executive, noting that FM Global will be commemorating its 175th anniversary in 2010.

“The only difference today, compared to 1835, is that the scope of FM Global's challenges is vastly greater as many clients become more multinational and expand into new territories where building standards and codes do not always include a focus on facility protection. Moreover, complex global supply chains, driven by cost efficiencies, can lead to a much higher risk profile for many enterprises.”

However, FM Global is well positioned for the coming year and beyond, Subramaniam remarked.

“Looking back over the past decade, FM Global has successfully weathered extreme natural disasters and unimaginable terrorist attacks, and endured a once-in-a-lifetime financial market upheaval and meltdown. We can attribute our success to the dedicated commitment of our employ­ees and loyal policyholders. And for that, we are most grateful.”