17 August 2017
FMG’s financial year has ended with another record in paying claims, up $15m on last year to $152m.
“Paying claims is one of the main reasons we exist—and being here for clients when the unexpected happens is something we take a lot of pride in as a team,” said FMG’s Chief Executive Chris Black.
The higher than expected claims costs, along with $18m in costs associated with the Kaikoura Earthquake, have been the main factors in FMG recording a modest loss this year of $3.3m.
“As a mutual we take a long-term view to relationships and business. Given the volatile nature of our industry we anticipate a loss from time-to-time and are therefore, well placed to manage this year’s result.
“Overall the business is financially sound and one of the most well capitalised and fastest growing insurers in New Zealand. We have $226m in reserves, an A (Excellent) credit rating and 2.25 times the minimum capital required by our regulator, the Reserve Bank of New Zealand,” said Mr Black.
More and more farmers and growers, commercial businesses and lifestyle owners are choosing to insure with FMG and in the last year client numbers grew by 6%. In addition, the Mutual experienced 9.5% headline income growth in comparison with expense growth of just 4.6%. The personal insurance side of the business also grew strongly with double-digit growth on the previous year.
“We have a clear strategy for the Mutual. This is underpinned by a primary focus on serving our existing clients well and attracting new clients by offering them something quite different to the rest of the market. Part of this is about providing specialist risk-advice and having a direct model, which is anchored around a mutual philosophy.
“In support of the strategy I’d like to welcome our three newly elected Board members in Geoff Copstick, Murray Taggart and Stephen Allen. All of them bring extensive business and rural expertise.
“With the Kaikoura Earthquake, we’re making good progress and have now settled 40% of our 3,300 claims. We remain on track to be three-quarters complete one year on in mid-November. We will have achieved this while at the same time responding to the much higher level of non-earthquake claims, including those related to ex-cyclones Debbie and Cook.
“We have used just 20% of our reinsurance cover in respect of the Kaikoura Earthquake and continue to receive excellent support from our reinsurers. This combined with being well capitalised means we can continue to be here for clients when they need us most, including if there happens to be another Kaikoura-type event,” said Mr Black.
Also of note this year, Farmstrong, our non-commercial rural wellbeing giveback initiative, continued to grow from strength to strength and now has 50% total awareness amongst farmers and growers.
FMG was named the 2016 ANZIIF Direct Insurer of the Year and 2016 Cooperative Business of the Year. FMG was also again named one of the best places to work in New Zealand.
For a full breakdown of FMG’s financial results you can view the Annual Report here.