NU Online News Service, March 27, 10:19 p.m. EDT
According to data compiled by SNL Financial LC, Johnston, R.I.-based mutual property insurer FM Global reported a net loss of $32 million for 2011 compared to net income of more than $767 million for the prior year.
In a statement, FM Global says it posted a combined ratio of 121, driven by 20 large natural disasters for 2011. Policyholder surplus declined by 5.5 percent to $6.9 billion with net losses incurred for disasters in 2011 exceeding losses incurred in 2010 by more than $1 billion.
The company did end 2011 with $5.1 billion of gross premium in force, an increase of 5.4 percent over the previous year, and net-earned premium grew by close to 6 percent to $3.4 billion.
“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,” says Shivan S. Subramaniam, the company’s chairman and chief executive officer in a statement.
Among some of the business results the company highlighted:
- Completed issuance of $208 million in membership credit to policyholders due to loss-prevention efforts. The company says it has reduced the premium charged to policyholders by $1.7 billion since 2001 through membership credit.
- Has a 96 percent retention rate, the highest for FM Global in more than a decade and “significantly higher than the industry average.”
- Issued 70 percent of national policies prior to the effective dates.
- The company unveiled its Center for Property Risk Solutions—a 12,000 square-foot laboratory that allows the insurer’s engineers to gain hands-on experience with the loss prevention and control systems they will encounter at the company’s claim facility.
“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,” says Subramaniam.
Correction: FM Global is a property insurance company and its policy holder surplus declined to $6.9 billion.