Commercial property specialist insurer FM Global says a 22.9% drop in net profit last year was due to a stronger US dollar and higher expenses.

Net profit fell to $US737.8 million ($960.1 million), while gross written premium declined to $US5.46 billion ($7.1 billion) from $US5.67 billion ($7.38 billion) in 2014.

Overall losses, loss adjustments and other expenses jumped to $US3.25 billion ($4.22 billion) from $US3.05 billion ($3.97 billion).

The US-based insurer’s combined operating ratio deteriorated to 85.3% from 79.4%.

Consolidated gross premium was down 2.5% to $US5.4 billion ($7 billion).

FM Global says the tough business environment, magnified in recent years by low interest rates and the growth of alternative capital, has continued to weigh on the industry.

“This combination produced a very competitive marketplace [last year] and is likely to continue into [this year],” CEO Tom Lawson and Chairman Shivan Subramaniam said.

“Our course remains steady, but we will aggressively pursue our strategic goals, with a focus on building an agile, innovative and diverse workforce.”