FM Global recorded net income of $US774 million ($746 million) last year, compared with a net loss of $US41.5 million ($40 million) in 2011.

The combined ratio was 85.7%, despite Superstorm Sandy, which prompted the insurer’s largest net aggregate natural disaster loss, on about 2200 claims.

The ratio is an improvement on 121% in 2011, when the Thai and Brisbane floods, US tornadoes and the Japanese and Christchurch earthquakes took their toll.

FM Global ended last year with $US5.5 billion ($5.3 billion) of consolidated gross premium in force, up 8.6%.

Policyholder surplus grew 14.9% to $US7.9 billion ($7.6 billion).

It was a “very good year”, according to FM Global Australia Operations Manager Ian Berg.

“If not for Sandy, it would have been an extraordinary result,” he told insuranceNEWS.com.au.

Client retention rate was firm at 94% and premium from new business grew 6.5%.

The company has created a Singapore-based Asia-Pacific division to support growth in the region, and AM Best and Fitch have affirmed FM Global’s business strength ratings at A+ and AA respectively, unchanged since 2007.

Chairman and CEO Shivan Subramaniam has hailed last year’s “outstanding” result.

“FM Global’s financial capacity enabled us to absorb the losses we incurred from one of the costliest natural disasters in our 178-year history with manageable impact to our bottom line,” he said.

“Likewise, our engineering expertise and superior claims-handling helped minimise those losses further.”

The Australian business had a strong year thanks to lower individual risk losses – such as fires or machinery breakdowns – and fewer catastrophes than in 2011, Mr Berg says.

“We didn’t have a lot of natural disasters in 2012,” he said. “It was a very good year in Australia, markedly better than average.”

The strong showing is down to work with large corporate clients on risk engineering and risk improvement, he says.

The local market is competitive, according to Mr Berg. “After the 2011 losses there was a firming of pricing in late 2011 and through 2012. That has backed off.”