Farmers Mutual Group (FMG or Mutual) has reported a notable financial turnaround for the 2023/24 fiscal year, following a significant loss in the previous period.
The insurer recorded an after-tax profit of $76.7 million, a key development in rebuilding the capital depleted by last year’s losses. This profit also enhances FMG’s solvency, reinforcing its capacity to manage future catastrophic events.
Chief executive Adam Heath (pictured) attributed the recovery to favourable conditions in investment markets and the absence of major disasters during the year.
“Almost half of this profit is due to the favourable performance of investment markets, coupled with the fact [that FMG] has not had to tackle any major catastrophic events over the course of the 2023/ 24 financial year,” he said.
He also highlighted FMG’s resilience during the previous year, which saw the insurer pay out over $270 million in claims related to Cyclone Gabrielle and the Auckland Anniversary Floods. This aligns with the Insurance Council of New Zealand’s (ICNZ) data released in June, which revealed that the industry has already settled 112,746 out of 118,037 claims, totalling approximately $3.8 billion.
“While this year’s profit may seem like a sizable return for the Mutual, and it is, when we take a longer-term view and average it against last year’s loss, FMG is much closer to the level of profitability required to remain a sustainable and resilient insurer that is fit for the future,” he said.
Heath reported that nearly 6,000 new clients joined FMG during the year despite the rural sector facing tough conditions.
“I acknowledge that this profit comes at a time when many in rural New Zealand Aotearoa are facing challenges, particularly members and clients in the sheep and beef sectors,” he said.
He stressed that achieving sustainable profitability is essential for FMG to continue supporting these communities, including through the disbursement of over $260 million to those affected by Cyclone Gabrielle and the Auckland Anniversary Weekend floods.
“Sustainable profitability over the long-term places FMG in a strong position to deliver for our members and clients, standing the Mutual in good stead to continue supporting rural and provincial communities in the aftermath of events like Cyclone Gabrielle, which are expected to increase in frequency and severity in the future,” Heath said.
FMG members are invited to participate in the annual general meeting (AGM) on Aug. 23, either virtually or in person in Wairarapa.
