FMG has posted an after-tax profit for the 2023/24 financial year of $76.7 million, a significant improvement on the previous year’s record loss.
The profit helps to replace its members’ capital, which had eroded as a result of the previous year’s loss.
It also provides a welcome boost to solvency, improving FMG’s ability to weather future storms and catastrophic events.
The result has been bolstered by two significant external factors playing into the New Zealand-owned and operated insurers’ favour, chief executive Adam Heath said.
“Almost half of this profit is due to the favourable performance of investment markets, coupled with the fact the Mutual has not had to tackle any major catastrophic events over the course of the 2023/ 24 financial year,” Heath said.
Other key points from the financial result included $43.7m in investment income compared with $9.6m in 2023, an increase of almost 6000 clients and a strong underlying business performance, including continued focus on being better as well as a bigger business.
He said the previous year was one to be proud of, paying out more than $270m in Cyclone Gabrielle and Auckland Anniversary flood-related claims by the end of the financial year, and providing assurance to clients that the Mutual is well placed to continue supporting them during future events.
“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.”
Heath acknowledged that the result came at a time when many in rural New Zealand are facing challenges, particularly those in the sheep and beef sectors.
Long-term sustainable profitability puts FMG in a strong position to deliver for its members and clients, standing it in good stead to continue to support communities in the aftermath of events like Cyclone Gabrielle, he said.
As a mutual insurer, any profit FMG makes is not distributed as dividends to shareholders; rather, it is invested back into the business.
“The mutual model allows us to keep those funds right here in New Zealand Aotearoa,” he said.
FMG will hold its annual meeting in Wairarapa on August 23, when members can attend either through a virtual platform or in person.
