FM Global posts record profit, surplus for 2007

PBN Staff

02/21/2008

IN DECEMBER, the company announced plans for a $60M new headquarters off Central Avenue in Johnston, near its current main offices. The new HQ is slated to open next year. The rendering above shows the view from the main drive. /

JOHNSTON – Commercial property insurer FM Global today said its net income surged 26 percent in 2007 to a record $928 million, accelerating from the previous year’s 16-percent gain. Last year was “its sixth consecutive year of strong financial and operating performance,” the company said
For all of 2007, FM Global posted gross premiums in force of $4.7 billion, an increase of 4.2 percent compared with 2006. The company credited “the absence of large insured natural disaster losses and much better than composite projections for the U.S. property and casualty insurance industry,” which boosted its profitable combined ratio to 74.3 percent.
Its policyholder surplus reached an all-time high of $6.3 billion, increasing 21 percent last year after rising 18 percent in 2006, and yielding an annual compound growth rate of 24.7 percent for the past five years, FM Global said. Its policyholder retention rate dipped slightly, however, to 92 percent in 2007 from 93 percent the year before.
Among other 2007 highlights, the company cited the granting of regulatory approval for an FM Global office in Beijing, “the first step toward establishing a China-based wholly-owned insurance company approximately three years from now.” (READ MORE.)

And in December, the company announced plans to build a $60 million headquarters on a 93-acre parcel off Central Avenue, near its current main offices on Atwood Avenue. (READ MORE).
“This past year, FM Global continued to increase its underwriting capacity, improve policy coverage and offer enhanced competitive terms and conditions,” Chairman and CEO Shivan S. Subramaniam said in a statement today.
The company paid out $341 million in membership credits to eligible clients who renewed their policies in 2007, “as a way of sharing its profitability … due to better-than-expected operating performance in recent years,” and approved a similar payout of $380 million to policyholders who renew in 2008. (READ MORE.)
“Overall, we conclude that the company can be successful – even in a price-driven market – by emphasizing value-added products and services and working with our policyholders to achieve significant risk improvement,” Subramaniam said.
Going forward, he added, it is imperative that FM Global continue to focus on helpings clients address new business risks presented by globalization as they expand, acquire, outsource or relocate operations to emerging markets.
The Johnston-based insurer is Rhode Island’s largest private company and ranks 578th on Fortune magazine’s list of the largest companies in America. (READ MORE) Rated “Superior (A+) by A.M. Best and “Very Strong” (AA) by Fitch Ratings – ratings that were affirmed this year – FM Global has been honored as “Best Global Property Insurer” and “Best Property Insurer – North America” by Global Finance magazine.
FM Global, a policyholder-owned mutual insurance company, is a commercial and industrial property insurer with 4,800 employees in 52 offices worldwide. Its roots in Rhode Island stretch back to 1835. Additional information is available at www.fmglobal.com.