FM Global earmarks $435 million for its largest-ever membership credit

Commercial property insurer FM Global has earmarked $435 million for premium reductions for its clients that renew their policies between June 30 and June 29, 2014, the  company announced Tuesday.

The reductions, part of what FM Global calls “membership credits,” is the largest the insurer has ever offered its clients. The company credits its financial success to its policyholders’ “diligent property loss prevention efforts.”

Long-term clients will see the most benefit, with the credit based on client tenure, the company said in its statement Tuesday. Roughly 1,900 clients qualify for the credit, and some of those have been policyholders with the insurer since the late 1800s, it noted.

FM Global clients holding policies consecutively for fewer than five years will be eligible for a 5% credit, while those who have had policies for five to 19 consecutive years will be eligible for a 10% credit, the company said. Those clients who have held policies for 20 consecutive years or longer will be eligible for a 15% credit.

The $435 million announced Tuesday brings the total amount of membership credits given to about $2.1 billion, since 2001, when the program was started.

“Our clients’ commitment to the fundamental belief that the majority of loss is preventable has contributed to FM Global’s favorable loss experience, enabling us, once again, to apply a membership credit against renewal or anniversary premium to eligible policyholders,” Shivan S. Subramaniam, chairman and CEO commented in the company statement.

“This means that, as policyholders of a mutual company, in addition to receiving stable capacity and services on a worldwide basis, they also share in the benefits of their risk improvement efforts.”