Commercial property insurer FM has announced a membership credit of approximately US$1.5 billion for eligible mutual policyholders, which will be applied as a premium offset at renewal during the 2026-27 policy period.
According to FM, the membership credit will be available to mutual policyholders whose renewal or anniversary dates fall between June 30, 2026, and June 29, 2027. The credit will be applied as an offset against premium at the time of renewal for accounts that meet the program’s eligibility and tenure requirements. The insurer links the scale of the allocation to 2025 performance and insureds’ risk management activity across its global portfolio. FM reports that in 2025 it worked with clients to implement more than 48,000 loss prevention recommendations, which it estimates reduced property risk loss exposure by about US$1 trillion.
FM also notes that, in addition to the membership credit, it has introduced a separate “resilience credit.” Taken together, the 2026 membership and resilience credits total US$2.3 billion and, according to the mutual, represent more than 100% of its 2025 underwriting profit being returned to policyholder-owners through credits. “This record membership credit reflects the deep, long-term partnerships we have built with our Australian clients. Their consistent focus on loss prevention and resilience directly contributes to stronger outcomes for their businesses and for the mutual as a whole,” said Andrew Stafford, senior vice president and operations manager for Australia and New Zealand at FM.
FM’s membership credit program continues to follow a tiered structure based on the length of a policyholder’s continuous participation in the mutual. For the 2026 declaration, FM mutual policyholders eligible for the credit will receive:
In addition to these standard tiers, FM is applying a one-time 5% increase to the membership credit for all eligible clients. FM describes this additional percentage as recognition of a higher level of loss mitigation and prevention activity undertaken by policyholder-owners over the past year. FM states that, once this year’s credits are allocated, it will have returned more than US$8.9 billion to mutual policyholders through the membership credit program since it began in 2001.
The membership credit announcement follows a Jan. 30, 2026, ratings action in which AM Best affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa” (Superior) for Factory Mutual Insurance Company (FMIC) and its core subsidiaries, collectively known as FM or FM Group. The outlook on these ratings remains stable. AM Best also affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) for Velocity Specialty Insurance Company (VSIC), an affiliated carrier based in Wilmington, Delaware, also with a stable outlook.
The rating agency said FM Group’s ratings reflect balance sheet strength that it assesses at the strongest level under its Best’s Capital Adequacy Ratio, together with operating performance, business profile, and enterprise risk management. AM Best noted surplus growth in recent years and through the first nine months of 2025, supported by underwriting profits and investment income. AM Best highlighted FM’s use of per-risk and catastrophe reinsurance across its commercial property portfolio and a reserving approach that has produced favourable development on prior periods. Low underwriting leverage was cited as a factor supporting the group’s capital position.
The agency observed that FM has reported underwriting profits in each of the most recent five years and is expected to post further gains for full-year 2025, underpinned by underwriting initiatives focused on risk selection and rate adequacy, along with net investment income and capital gains from an investment portfolio with a significant allocation to equities. AM Best also noted that FM’s risk appetite can result in volatility from catastrophe events but said this has been managed over the group’s operating history. For VSIC, AM Best pointed to strong risk-adjusted capitalisation and improving underwriting results following early start-up losses, as well as both implicit and explicit support from FMIC, including a capital contribution in the fourth quarter of 2025 to support the affiliate’s growth.
The combination of the US$1.5 billion membership credit, the separate resilience credit, and the affirmed ratings may be relevant when assessing counterparty strength, capital position, and the economics of placing large commercial and industrial property programs with a mutual carrier. The timing of the credit window and the tenure-based tiers will be key considerations for local risk managers and brokers as they plan renewals between June 30, 2026, and June 29, 2027, and evaluate how the membership credit interacts with pricing, retention levels, and broader risk financing strategies.
