FM Global reports increased premium base in 2011, posts catastrophe-induced 121% combined ratio

Business property insurer FM Global increased its premium base in 2011, helping to offset record-high net losses incurred from disasters in 2011.

FM Global reported $5.1 billion of gross premium in 2011, an increase of 5.4%. In addition, it reported a 5.8% increase in net earned premium (to $3.4 billion).

However, the mutual insurance company posted a combined ratio of 121%, driven by 20 large natural disasters of 2011. Policyholder surplus declined by 5.5% (to $6.9 billion).

Net losses incurred from disasters in 2011 exceeded losses incurred in 2010 by more than $1 billion, the company reported in a statement.

“The events of 2011 reinforced the strength of our promise to policyholders: to be a stable market, provide unique services and respond quickly when they have a loss, with a focus on helping them to resume business operations as swiftly as possible,” said Shivan S. Subramaniam, FM Global chairman and CEO. “Although the frequency and severity of the natural disaster losses were our highest on record, we didn’t find it necessary to modify our risk assessment and risk improvement practices at the policy level or suggest a redesign of our reinsurance practices.”