A.M. Best Co. has affirmed the financial strength ratings of ‘A+’ (Superior) and issuer credit ratings of “aa” of FM Global Group and its lead company, Factory Mutual Insurance Company, and its other members, which include FM Insurance Company Limited (FMI) (United Kingdom), Appalachian Insurance Company and Affiliated FM Insurance. All companies are domiciled in Johnstown, RI, unless otherwise specified. The outlook for all of the ratings is stable.
The affirmation of the ratings reflects FM Global’s “very strong capitalization, solid operating performance, benefits from its loss prevention technology and property conservation, and its market leadership position in the commercial property market,” Best explained. “In addition, FM Global utilizes a very conservative approach to risk management that permeates all aspects of the group’s operations. These factors are somewhat offset by the recurrence of sizable membership credits, the group’s high investment leverage and ongoing exposure and susceptibility to future acts of terrorism as well as natural catastrophes.
Best also noted that Factory Mutual, Appalachian and Affiliated FM are “part of an intercompany pooling arrangement, with Factory Mutual being the lead pool member. Although FMI is not a pooling member, it receives significant support from Factory Mutual including, but not limited to, a stop-loss agreement. FMI is integral to the group’s strategy of providing insurance coverages to both its U.S. clients’ international operations and sovereign companies in their country of origin.
“FM Global is a market leader among providers of commercial property insurance in the United States serving a significant number of Fortune 1000 companies worldwide.
“The group’s ability to consistently retain more than 90 percent of its policyholders is a result of its stable capacity, unmatched engineering, global reach, loss prevention technology, shared commitment (with its policyholders) to property preservation and the strategic use of membership credits.
“FM Global remains one of the prominent underwriters of highly protected risks within the commercial property market and is widely recognized throughout the industry for its extensive loss control, risk management and engineering capabilities.”
Source: A.M. Best
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