Johnston, R.I.-based FM Global, one of the world’s largest business property insurers, said its policyholders will collectively receive an estimated $435 million in premium reductions when they renew their policies between June 30, 2013 and June 29, 2014.
FM Global said on May 7 that the “membership credit” is the largest the company has ever offered its clients and is a result of the mutual insurer’s financial success due, in large part, to policyholders’ diligent property loss prevention efforts. The credit each client will receive will be based on client tenure, with longer-term clients benefiting the most.
FM Global said approximately 1,900 clients would qualify, some of whom have been policyholders with FM Global since the late 1800s. Following this credit, FM Global clients will have received approximately $2.1 billion in membership credit since the program was first introduced in 2001.
“Our clients’ commitment to the fundamental belief that the majority of loss is preventable has contributed to FM Global’s favorable loss experience, enabling us, once again, to apply a membership credit against renewal or anniversary premium to eligible policyholders,” said CEO Shivan Subramaniam.
“This means that, as policyholders of a mutual company, in addition to receiving stable capacity and services on a worldwide basis, they also share in the benefits of their risk improvement efforts,” he said.
FM Global said clients who have been holding policies consecutively for fewer than five years will be eligible for a 5 percent credit; clients with five to 19 consecutive years of policies will be eligible for a 10 percent credit; those with policies for 20 consecutive years or more will be eligible for a 15 percent credit.
A more detailed overview of the 2013/2014 membership credit plan — including eligibility, timing and basis for calculations — is available at the FM Global website.
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