Claims resulting from bad weather have almost halved the profit of NZ rural insurer Farmers’ Mutual Group (FMG).

It has posted a gross profit of $NZ13.53 million ($11.6 million) for the year ending March 31, representing a 46% slide on the previous year’s result. FMG’s net profit fell 35%, to $NZ11.45 million ($9.8 million).

FMG Chairman Peter Jensen attributes the declining profit to a combination of a challenging claims environment, a $NZ5.9 million ($5.1 million) software write-off and lower investment income of $NZ5.1 million ($4.4 million).

Despite the reduced profit, FMG premiums increased 7.2%.

Extreme cold and wet weather pushed up overall claims by $NZ16.4 million ($14.1 million). The South Island snowstorms in June last year accounted for half the increase, with more than 2000 claims lodged.

During the year, the group sold FMG Australia to Australian Unity for $NZ6.2 million ($5.3 million) and Farmers’ Mutual Life to Fidelity Life Assurance for $NZ2.66 million ($2.28 million). Australian Unity onsold the FMG Australia operation to Calliden last month.