Commercial property insurer FM says its loss ratio is below target this year, helped by a benign catastrophe environment so far. 

The mutual insurer – which has offices in Sydney, Melbourne and Perth and writes more than $500 million of premium in Australia – rebranded from FM Global last week. 

FM operations senior VP Australia and NZ Andrew Stafford told insuranceNEWS.com.au the loss ratio is below a 60%-65% global target as the US enters hurricane season, which began this month with Beryl becoming the earliest storm to reach category 5 strength. 

“The year-to-date loss ratio is below our plan, both on catastrophe perils and individual perils, so tracking nicely,” Mr Stafford said.  

“We’ve already seen the first hurricane come through – fingers crossed it continues.” 

FM has recorded a reduction in big catastrophe events but an increase in secondary peril losses. 

It is focused on risks such as tornadoes, bushfires and hail as solar panels become ubiquitous, and sends engineers to client locations to recommend improvements. 

“That’s where our focus is really directed,” Mr Stafford said. “Climate-related risk associated with renewables is quite a challenge – how do we build a more resilient solar panel to withstand hail with the proliferation of every building putting solar panels on? How do we manage that? 

“From a claims perspective, we’ve seen an increase in traffic in secondary perils as they become more frequent and more severe, but our clients are investing in ways to reduce traditional fire-based or machinery-based perils, so we’re seeing a reduction in claims traffic there.” 

An FM renewable energy unit was launched at the start of this month – the first time FM has created a new market product in 25 years. 

“There has been big investment in our renewables division. This is a new renewables group based in Dallas. We’re looking to provide a bespoke risk transfer solution for renewables as that continues to evolve,” Mr Stafford said.   

“When we talk to our clients, climate change and renewables are top of mind.” 

FM customers include Australia’s largest companies, spanning mining, power generation, food production, chemical, data centres and infrastructure. Under the mutual model, eligible policyholders have received more than $US5 billion ($7.51 billion) in credits since 2001.  

Mr Stafford says FM has global annual premium of about $US10 billion ($14.85 billion) and after setting up in Australia in 1973 to service US clients with operations here, the branch has grown to contribute $500 million.   

“We were predominantly a US company ... but now we’ve got much better brand awareness in Australia and Europe and the UK, and so the need to have ‘global’ [in the name] is not there any more.”