FMG has recorded its largest ever after-tax profit of $59.3m – in a year that also saw its client base increase to over 100,000 for the first time and rural market share grow to 52%.
Chief Executive Officer Chris Black says despite various challenges, including Covid-19, the overall scorecard for 2020/21 was one for the record books.
“This year’s result is down to three main factors: a strong underwriting profit, a relatively benign year in terms of storms and catastrophe events and a bounce back in equity markets.
“Posting a healthy profit is pleasing and needs to be taken in the context of other years,” says Mr Black.
“If we look at the last five years, profits have ranged from this year’s result to a loss of $3m in 2017 – mainly due to the Kaikoura earthquake and multiple storms that year.
“On average our profits have been around $19m over the last five years, which is about the level we need to support a steadily growing business such as ours,” says Mr Black.
This year’s profit will be added to FMG's reserves, bringing them to $323m.
As a mutual, FMG is owned by its members, meaning profits remain in New Zealand and are reinvested in the business to support rural and provincial New Zealand.
This includes ensuring we continue to provide access to affordable insurance and are there when clients need us, such as the Boxing Day hailstorm near Nelson, where we paid out some $20m to growers and other clients, and the recent Canterbury flood where we’ve settled nearly half of the 600 claims.
We have some 700 claims from the recent Westport storm which we’re continuing to work through.
“Our support for the sector now extends to over 100,000 people and businesses who trust FMG with their insurances, which is something we’re extremely proud of,” says Mr Black.
FMG Board Chair Tony Cleland says with the ongoing challenges facing rural New Zealand including labour shortages, water plan rules, carbon emission standards, general compliance, and licence to operate requirements, FMG’s strength and stability becomes even more important.
“We strive to ensure the Mutual is in a position to provide farmers and growers with ongoing best-in-class advice, service and support, and the results we have achieved this year position us well.
“Being the insurer for the majority of rural New Zealand allows FMG to have a stronger voice on topics relevant to farmers and growers. It also provides more scope to give back to rural New Zealand through important sponsorships such as the FMG Young Farmer of the Year Contest, initiatives like Farmstrong and more recently a partnership with Melanoma New Zealand,” says Mr Cleland.