FM Global's clients will collectively receive an estimated $465 million in premium reduction when they renew their policies between June 30, 2014 and June 29, 2015, the Johnston, Rhode Island-based insurer announced Tuesday.
FM Global said that the “membership credit” is the largest the company has ever offered its clients and is a result of insurer's “continued financial success due, in large part, to policyholders' diligent property loss prevention efforts,” according to a statement issued by the commercial property insurer.
Each client's credit will be based on client tenure, with longer-term clients benefiting the most. FM Global clients holding policies consecutively for fewer than 5 years will be eligible for a 5% credit; 5 to 19 consecutive years will be eligible for a 10% credit; and 20 or more consecutive years or more will be eligible for a 15% credit'
FM Global estimates that about 1,900 clients — some of which have been policyholders since the 19th century — will qualify for the credit. The insurer says that, after this credit, its policyholders will have benefited from about $2.5 billion in membership credit since the program was introduced in 2001.
“Our favorable loss experience, due to the diligence our clients have shown towards property risk improvement, has made it possible for us to provide another premium credit to eligible policyholders,” said FM Global Chairman and CEO Shivan S. Subramaniam in the statement. “As a mutual company, our policyholders are our owners, so, naturally they share in the benefits of taking prudent steps to protect their property and business continuity.”