Factory Mutual Insurance Co. in Johnston, which operates under the name FM Global, will raise prices an average of 10 percent to 15 percent after a record hurricane season, Chairman Shivan Subramaniam told Bloomberg News earlier this week.
The company, owned by its policyholders, anticipates boosting rates across the board, Subramaniam said in an interview Jan. 24 with Bloomberg News. FM Global insures property for one-third of Fortune 1000 companies. The company’s clients include General Electric Co., PepsiCo Inc., Caterpillar Inc. and GlaxoSmithKline Plc.
FM Global’s hurricane claims were manageable because the company helps clients engineer risk-reduction plans rather than just assume their losses, Subramaniam said.
“If you compare ourselves to other commercial insurers in that part of the marketplace, our numbers were significantly lower than theirs,” said Subramaniam, who is also CEO. “The concept that losses are preventable works.”
Hurricane Katrina, which submerged New Orleans and stripped bare coastal areas of Louisiana and Mississippi in August, caused $300 million in pretax losses for FM Global, Subramaniam said. Hurricanes Rita and Wilma added about $120 million, he said.
FM Global estimates it collected about 25 percent of the premiums paid by companies paying more than $100,000 for insurance in 2004, spokesman Steve Zenofsky said. In the United States, it had about a 30 percent market share, he said.
