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OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “aa” of Factory Mutual Insurance Company (Johnston, RI) and its subsidiaries, which are collectively referred to as FM Global Group (FM Global). The outlook of these Credit Ratings (ratings) remains stable. (See below for a detailed listing of the companies.)

The ratings reflect FM Global’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

FM Global’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is considered to be strongest and has been time-tested. The group is a leading global property insurer with a balance sheet that has demonstrated an ability to withstand catastrophes year-over-year as recently evidenced in 2017 and 2018. Substantial reinsurance capacity plays an integral role in its ability to preserve capital.

Although underwriting results recently reflected higher volatility, strong investment gains garnered from FM Global’s sizeable investment portfolio have lessened the impact from those heavy catastrophe loss years. Five and 10-year average combined ratios have regressed significantly toward those of the commercial property composite averages, due to the significant catastrophe losses highlighted above. Its strong results over the long term are net of significant membership premium credits afforded to policyholders based on loss experience and implementation of FM Global’s loss control and minimization recommendations.

Buoyed by its strongest risk-based capitalization, management has a history of protecting its policyholders by conservatively reserving losses in a timely fashion. This recognition has reflected worst-case underwriting results typically, especially in CAT scenarios. Superior knowledge of its risks and expedient settlement of claims have uncovered the true underwriting results quickly. These attributes have enabled the company to move on quickly from significant CAT events with results, especially in 2017 and 2018, that have developed favorably in each case with actual losses approximating half of modeled losses in most cases.

As a mono-line commercial property insurer, the group has a singular focus on its specialty expertise. This specialty focus combined with its status as a mutual legal entity enable management to take a longer-term view of running its business and to manage the inherent volatility in its short-tail large commercial property risks. FM Global reinvests heavily in its engineering-based approach, and is an innovator in contributing to the industry’s loss control and minimization through flood mapping and modeling internationally, as well as in cyber risk assessment. FM Global is a well-run organization that has been a consistent property/casualty insurer, with a strong and experienced management team that has plenty of depth.

The stable outlooks reflect AM Best’s view that the group’s risk-adjusted capitalization will remain more than supportive of the current ratings, driven by strong earnings and its leadership position in providing property coverages worldwide. Positive rating action could result if the group’s operating profitability demonstrates lesser volatility over an extended period of time, reflecting superior risk management. Negative rating action could result if operating performance or risk-adjusted capitalization fall markedly short of AM Best’s expectation.

The FSR of A+ (Superior) and the Long-Term ICRs of ‘‘aa” have been affirmed with stable outlooks for Factory Mutual Insurance Company and its subsidiaries:

  • Appalachian Insurance Company
  • Affiliated FM Insurance Company
  • FM Insurance Company Limited
  • FM Insurance Europe S.A.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Dan Teclaw
Senior Financial Analyst
+1 908 439 2200, ext. 5394
[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Susan Molineux
+1 908 439 2200, ext. 5829
[email protected]

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
[email protected]