Tuesday, 22 August 2017 10:55

Record claims hit FMG

Written by 
Chris Black. Chris Black.

Rural insurer FMG says paying out a record amount of claims, because of the Kaikoura earthquake, has seen it incur a loss for the latest financial year.

It paid out a record $152 million in claims during the year – up $15m on last year.

“Paying claims is one of the main reasons we exist, and being here for clients when the unexpected happens is something we take a lot of pride in,” chief executive Chris Black says.

Black has blamed FMG’s loss this year of $3.3m on higher-than-expected claims costs, along with $18m in costs associated with the Kaikoura earthquake as the main factors.

“Overall the business is financially sound and one of the most well capitalised and fastest growing insurers in New Zealand. We have $226m in reserves, an A (excellent) credit rating and 2.25 times the minimum capital required by our regulator, the Reserve Bank of New Zealand.”

Black says more farmers and growers, commercial businesses and lifestyle owners chose to insure with FMG during the year: client numbers grew by 6%. And the personal insurance side of the business also grew strongly with double-digit growth on the previous year.

“We focus on serving our existing clients well and attracting new clients by offering them something quite different from the rest of the market; part of this is providing specialist risk advice and having a direct model anchored in a mutual philosophy.”

Black says FMG is making good progress with the Kaikoura earthquake claims and it has now settled 40% of its 3300 claims and aims to be three-quarters complete one year on in mid-November.

“We’ve achieved this, while at the same time responding to the much higher level of non-earthquake claims, including those related to ex-cyclones Debbie and Cook.

“We have used just 20% of our reinsurance cover in respect of the Kaikoura earthquake and continue to receive excellent support from our reinsurers,” he explained.

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