Rural mutual insurer FMG has reported a $22.8m profit after tax for the financial year ended March 31 (FY22), down from $59.3 million for the previous financial year.
In its annual report, FMG said that it received $256.7 million in net claims for FY22, up from $210.3 million in FY21. Gross written premiums grew to $458.5 million from $406.4 million. The insurer was also able to grow its capital reserves to $345.6 million from $322.8 million.
FMG chief executive Adam Heath (pictured above) said that these figures are present with a backdrop of a tough external environment for many of its clients and a competitive insurance industry for FMG. Some of the challenges encountered include moving into the recovery phase of the COVID-19 pandemic, increasing regulatory requirements, rising inflation, resourcing, supply chain constraints, growing geopolitical tensions and the increasing environmental challenges around climate change.
“In the context of these challenges, it is pleasing to show your mutual is in overall good health with net client growth across our four markets of rural, lifestyle, domestic and commercial growing by 6.3% this year,” Heath said. “That means we now have just over 107,000 clients who put their trust in FMG for their insurance needs. This level of trust and support, in turn, helps us to support the sector in line with FMG’s vision of helping to build strong and prosperous rural communities.”
FMG also presented a breakdown of where the premiums paid by its clients went. Out of each $100 paid by clients, $41 went to claims, $24 went to company operations costs, $8 to purchase reinsurance and $3 in profit, which is reinvested in FMG. The remainder went to government charges, namely $13 for GST, $6 for the Fire and Emergency NZ levy and $5 for the EQC levy.
“Whilst we are a mutual, we do need to run the business commercially,” Heath said. “Hence, our aim is to be profit-making, rather than profit-maximising. As a wholly Aotearoa/New Zealand-owned
insurer, these profits remain in New Zealand. They help us to apply a long-term lens and provide reinvestment back into the business to deliver fit-for-purpose products and help FMG be there when the unexpected happens.”
