JOHNSTON – FM Global on Wednesday announced 2015 profit and revenue both fell while its surplus grew to $11 billion.
The global business property insurer, based in Johnston, reported total net income falling 22.9 percent to $737.8 million compared with 2014; revenue declined 0.7 percent to $4 billion during the same period.
Regardless, the company said 2015 was one of the best years on record, as its combined ratio ended at 85.3 percent and its surplus grew 3.8 percent to $11 billion.
“These outstanding financial results as well as the superior client retention rate substantiate the enduring strength of our mutual business model, specialty focus and balance sheet,” said Thomas A. Lawson, president and CEO, in a prepared statement. “They are also positive indicators of a healthy, thriving organization, solely focused on helping keep our client-owners resilient.”
The company’s retention rate was 95 percent, which is above the insurance industrywide average of about 84 percent.
The company’s investment portfolio realized a 1.5 percent return, despite last year’s volatility in commodities, currency exchange rates and the equity markets. The strengthening of the U.S. dollar in the global marketplace fueled a 2.5 percent loss to the company’s gross in-force premium totaling $5.4 billion.
The company’s loss ratio, excluding membership credit and discontinued reserve increases, totaled 46.4 percent, as the decline in natural disasters worldwide kept claims “historically low,” according to the company’s earnings report. The 14.8 percent loss ratio from natural disasters was slightly higher than in 2014, but well below the company’s five-year average of 22.3 percent.
The company retained its A-plus and AA ratings from A.M. Best and Fitch, respectively, which FM Global has held since 2007. It is also rated A-Plus by Standard & Poor’s with a stable outlook.
FM global this year is also providing its third consecutive membership credit to eligible policyholders renewing between June 30, 2015, and June 29, 2016. Last year’s membership credit totaled $430.9 million and the company has paid out nearly $3 billion since its first credit given in 2001.
“As we look to 2016, we’ll continue to explore new ways to invest our capital into products and services that most benefit our clients,” Lawson said. “In particular, we will continue to capitalize on our engineering, research and analytics capabilities which will allow us to open new doors to helping our clients drive down their cost of risk and remain resilient.”
