FM Global Giving Renewal Customers $325 M In Credits
NU Online News Service, Oct. 21, 12:22 p.m. EDT?Mutual property insurer FM Global said its loss rates have been so low that business policyholders renewing next year will get a collective $325 million reduction on premiums.
The biggest price breaks will go to longtime customers, the Johnston, R.I.-based commercial and industrial property insurer said.
Clients with policies in effect as of Sept. 30, who renew beginning Jan. 1, 2004, are eligible for the credit in the form of a one-time distribution, the company said.
"As a mutual company, our policyholders are our owners, so, naturally they share in the benefits of our strong corporate performance," explained Shivan S. Subramaniam, FM Global's chairman and chief executive officer.
He said in a statement that a focus on loss protection and client commitment "has resulted in our losses being lower-than-expected over the last several years."
Mr. Subramaniam did not provide specific figures. He said besides allowing a credit, the surplus that has resulted from lower losses means that the company can offer more capacity to its clients.
The company said there will be a sliding scale of credits ranging from 6 percent for those holding policies less than five years to 15 percent for those holding policies for 20 years or more.
By example, a 20-year policyholder with an adjusted premium of $1,725,706 would get a membership credit of $258,856, the company said.
FM Global said there are a few exceptions to the credit including policies for surety and cargo coverage as well as program partners and captives.
The company said it has more than $2.8 billion in policyholder surplus.
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