FM Global reports strong 2005 financial results

FM Global’s 2005 financial results state that the commercial and industrial property insurer has realized a 14% increase in net income to US$635 million, representing the Copmany’s fourth consecutive year of strong results.
In addition, FM Global;s policyholder surplus grew 18.8% from 2004, to reach US$4.4 billion. The client retention rate for 2005 was 92%, one of the highest in the Company’s history. Further reports state that FM Global achieved a combined ratio of 77.4%.
Shortly before releasing its financial results for 2005, FM Global had received a Fitch Ratings upgrade to the financial strength rating of ‘AA’ (Very Strong). Fitch cited the Company’s “ability to incorporate its engineering expertise into its risk selection and underwriting processes” as the basis for the upgrade.
“While the unprecedented U.S. hurricanes had a substantial impact on most large commercial property insurers and their reinsurers, FM Global performed exceptionally well financially,” Shivan S. Subramaniam, FM Global chairman and CEO, says. “Due to risk improvements many of our clients made to their facilities using our engineering knowledge, the 2005 storms resulted in far less of an aggregate impact on FM Global’s balance sheet compared with our competitors. FM Global’s actual losses also were significantly less than predicted by statistical models.”
Overall, in 2005, FM Global increased its underwriting capacity; enhanced its ability to add value in managing clients’ locations exposed to natural disasters; and saw significant improvement in the efficiency and timeliness of delivering underwriting, risk improvement and claims services to policyholders worldwide.
Looking ahead at 2006, Subramaniam says FM Global will review
opportunities to develop indigenous business in Central and South America as well as Asia.