28 August 2018
Rural insurer FMG returns modest profit
New Zealand-owned insurer FMG has posted a $12.1m after tax profit, turning around last year’s $3.3m loss.
FMG made the announcement during its 113th Annual General Meeting, which was held in Hamilton on Friday.
The positive result was on the back of responding to an unprecedented year of extreme weather events, which in themselves cost $26m. All up claims incurred increased by $10m on last year to $162m this year.
FMG is making steady progress on settling earthquake-related claims. 95% of all Kaikoura claims are now settled, the gross cost of the event being an estimated $136m. There are 37 Canterbury claims still to be resolved.
“Being here when the unexpected happens is the key proof point for any insurer and I’m proud of the way the Mutual has responded to last year’s storms and the Kaikoura Earthquake, helping affected communities get back on their feet as soon as practically possible,” said Chris Black, CEO, FMG.
“Due to the combination of the earthquakes and more severe weather events, it’s inevitable that insurance will cost New Zealanders’ more. Over the last several years we’ve worked hard to absorb increased costs on behalf of clients, but this year we needed to make some adjustments.
“As a mutual we work hard to ensure the level of cover for the premium paid represents good value.
“While we need to run the business commercially and strive to make a modest profit, our mutual philosophy is anchored around profit-making, as opposed to profit-maximising,” said Mr Black.
“Importantly, making a profit allows us to invest in new products and services on behalf of clients, such as the recent launch of an online service channel for vehicle-only clients. It also allows us to support important initiatives such as the FMG Young Farmer of the Year Contest and Farmstrong, which in its third year has reached its highest levels of awareness and participation yet.”
FMG’s financial result this year can be attributed to a number of factors including increased premium growth and a solid return on a conservative investment portfolio.
2018 was also a record year in terms of headline growth for the Mutual for both general and personal insurance.
This reflects the fact that more farmers and growers, commercial businesses, lifestyle block owners and residential clients, are electing to put their trust in FMG. At the same time, client retention was the highest ever recorded.
“Our purpose is to help build strong and prosperous rural communities and we’ve been heavily involved in rural and provincial New Zealand again this year, sponsoring, hosting or supporting some 600 events and initiatives.
“We also opened two new buildings—a purpose-built office in the Manawatu, where around 300 (half our employees) are based and the first new build for some time in Hawera,” said Mr Black.
Colin Wright, Communications Manager, FMG
Mobile: 0274 129 200
For a full breakdown of FMG’s financial result you can view the Annual Report here.