March 3, 2009

Commercial Property Insurer FM Global’s ‘AA’ (Very Strong) Financial Strength Rating Affirmed by Fitch

JOHNSTON, R.I.—FM Global, one of the world’s largest business property insurers, has received a ‘AA’ (Very Strong) financial strength rating affirmation from Fitch Ratings. According to Fitch “FM Global’s long-term operating performance continues to be favorable” and applies to members of the FM Global Group, including Affiliated FM Insurance Company and FM Insurance Company Limited.

Fitch also revised its rating outlook from “Stable” to “Negative,” due to the potential impact of declines in stock market performance to FM Global’s investment portfolio. However, Fitch noted “FM Global’s longstanding investment philosophy has enabled the company to grow policyholders’ surplus value over the years.”

Fitch also remarked that FM Global’s cumulative three- and five-year statutory combined ratios through year-end 2008 were 81 percent and 79 percent, respectively, “which Fitch considers to be very strong.”

Fitch added that it “believes that FM Global’s favorable underwriting performance is due in large part to the company’s ability to incorporate its engineering expertise into its risk selection and underwriting processes. Fitch added that it “views FM Global’s engineering capabilities and loss prevention services as key advantages that are difficult for competitors to replicate and believes this expertise will result in sustainable underwriting results that are better than peers.”

The ratings company also indicated it “believes FM Global's high-quality bond portfolio provides ample liquidity to meet its policyholder obligations” and pointed out that FM Global had approximately US$1 billion of cash and short-term investments at year-end 2008.

Established nearly 175 years ago, FM Global (www.fmglobal.com) ranks 583 among FORTUNE Magazine’s largest companies in America. More than one out of every three FORTUNE 1000 companies and similar-sized organizations operating in more than 130 countries work with FM Global to develop robust property insurance and engineering solutions to protect their business operations from fire, natural disasters and other types of property risk. The company is ranked #1 by U.S. companies in each of the five most critical areas of insurance carrier performance, according to independent research by Greenwich Associates. FM Global also has been named “Best Property Insurer in the World” by Euromoney magazine and “Best Global Property Insurer” by Global Finance magazine. The company is rated A+ (Superior) by A.M. Best.

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