Commercial property insurer FM Global reported net income increased 16 percent from 2005, recording what the company said is the fifth consecutive year of strong financial and operating performance.
The Johnston, R.I.-based mutual insurer reported net income increased $102 million to $737 million for the year. Surplus grew to $5.2 billion in 2006, up $800 million. In-force premium was $4.5 billion.
The company's combined ratio was 75.3 and client retention rate was 93 percent.
The company said it plans to share its profitability with clients in the form of a $355 million membership credit against 2007 renewals.
"Given our strong capital base, operating record and mutual ownership, we have continued to offer our products and services at pre-Hurricane Katrina levels, unlike most of our competitors, while increasing surplus, maintaining our strong financial ratings and retaining clients," said Shivan S. Subramaniam, chairman and chief executive officer of the company, in a statement.
He said a major challenge going forward is dealing with a changing global manufacturing environment where corporate expansion often translates into the purchase of factories with "inadequate fire protection, which can significantly increase the risk to their global supply chains."
"As a premier insurer to owners of large commercial and industrial property worldwide, FM Global will continue to enhance its engineering focus to help clients protect their assets and supply chain from these fire exposures and also deliver seamless insurance services for clients wherever they may be in the world," said Mr. Subramaniam.
On its Web site, the company says it has 4,700 employees and 1,500 risk management engineers in 50 offices worldwide.
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