New Zealand-based FMG recorded a $NZ3.25 million ($3 million) loss in the year to March 31 as high claims costs, including $NZ18 million ($16.6 million) from the Kaikoura earthquake, took a toll.

The mutual insurer made a net profit of $NZ5.27 million ($4.86 million) the previous financial year.

FMG paid record claims of $NZ152 million ($140.21 million) in the year to March 31, up by $NZ15 million ($13.84 million).

“As a result of the higher level of claims, the mutual has posted a modest loss this year,” CEO Chris Black says in the mutual’s annual report. “Given the volatile nature of our industry, this is something we anticipate from time to time and are set up to handle.”

He says FMG has moved to adjust premiums this year, to ensure it remains in a strong position.

The insurer has settled more than one-third of 3300 claims from last November’s Kaikoura quake.

Its general insurance business recorded gross written premium of $NZ246.23 million ($227.13 million), up from $NZ224.95 million ($207.5 million). But claims expense soared to $NZ258.09 million ($238.04 million) from $NZ141.91 million ($130.88 million).