As a mutual society, the profits are invested back into the company and remain in New Zealand to the benefit of farmers and growers who are members and insurance customers.
Chief executive Chris Black, who has a month left in the role before resigning after 13 years, said the average level of profit over the past five years is $19m annually.
This is an appropriate level to support a steadily growing business, which has requirements for solvency and capital reserves.
Reserves at the March balance date were $323m and the customer base grew 7% to above 100,000.
FMG does not pay dividends or make rebates to members, being a mutual group and not a co-operative.
“No one has ever put capital into FMG, which has grown through retained earnings and investment income,” he said.
“All profits are reinvested, which ensures access to insurance, keeps premiums affordable and provides the level of cover customers are seeking.”
Black said the actuarial task for FMG was divided into two categories; above-ground risks like storms, floods, fires and thefts, and below-ground risks such as earthquakes and volcanic eruptions.
The below-ground events were less frequent but more significant, and vice versa.
Already this year FMG is responding to the big floods in Mid-Canterbury and Westport, whereas last financial year the biggest event was the Tasman hailstorm.
The cost of that event was $20m and there were 600 claims in Canterbury, half of which have been settled, and 700 from Westport.
In 2017 the Kaikoura earthquake and multiple storms caused FMG to make a loss.
Chair Tony Cleland says with the ongoing challenges facing rural New Zealand, including labour shortages, water plan rules, carbon emission standards, general compliance, and licence to operate requirements, FMG’s strength and stability becomes even more important.
“We strive to ensure the Mutual is in a position to provide farmers and growers with ongoing best-in-class advice, service and support, and the results we have achieved this year position us well.”
He also mentioned the FMG sponsorship of the Young Farmer of the Year contest, Farmstrong and a recent partnership formed with Melanoma New Zealand.
