FM Global profit up 16% after low disaster losses

JOHNSTON – FM Global, a major commercial and industrial property insurer and risk management adviser, said last week that its net income for 2006 was $737 million, up 16 percent from $635 million in 2005. Policyholder surplus grew from $4.4 billion to $5.2 billion.
The company credited its “better-than-expected operating performance” primarily to lower-than-expected natural disaster losses. It said its combined ratio for 2006 was 75.3 percent, and its client retention rate was 93 percent.
FM Global also reiterated a vow made in October that it would return $355 million of its profits to its commercial and industrial clients as credits toward their renewal premiums.
“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,” Chairman and CEO Shivan S. Subramaniam said in a news release.