FM Global distributes third membership credit

Factory Mutual Insurance Co., operating as FM Global, will distribute a collective US$355 million membership credit to policyholders as of Jan. 1, 2007, the insurer announced Wednesday.
The form of this one-time credit will be as an insurance premium reduction. It will be handed out to clients of FM Global that renew their policies in 2007 and had policies in effect as of Sept. 30, 2006.
With this act, FM Global will now have distributed three membership credits to policyholders since 2001, the most recent occurring in 2004. The three credits combined reach a value of approximately US$1 billion, according to the insurer.
“The credit will be based on a graduated scale that provides a greater percentage to longer-term clients,” FM Global said in statement.
The credit rates are 5% for those holding policies for less than five years, 10% for those holding polices from five to 19 years, and 15% for those holding policies for 20 years or more.
The statement says membership credit will be applied from Jan. 1, 2007, through Dec. 31, 2007, in the form of a premium offset at the time of policy renewal or annual anniversary.
“FM Global clients, who are our owners, have really embraced the powerful concept that the majority of all loss is preventable and, as a result, have proactively and effectively been managing their property exposures and reducing such risks over time,” Shivan S. Subramaniam, FM Global chairman and chief executive officer, said in the statement. “One of the benefits of being a mutual insurance company with a unique business model is that we can provide clients a premium credit that shares our favorable operating performance and acknowledges their loyalty to FM Global.”