Kia ora koutou katoa We certainly appear to be living in an era of volatility as I’m sure many of our Members and clients can attest to. Whether it’s a pandemic, weather events or inflation, the last few years have thrown up their fair share of challenges.
Rest assured that as stewards and kaitiaki of the Mutual, everyone across FMG is doing all we can to ensure its long-term future and success. All of FMG’s ‘One Team’ is focused on adopting an ‘owners mindset’ as we continue to serve you, our clients and prepare for whatever the external environment has in store.
The 2023/24 financial result certainly goes some way to helping us do that by bolstering the Mutual’s retained earnings and strengthening our Balance Sheet. It also helps to ensure that FMG remains a resilient and sustainable insurer that is fit for the future and able to honour the promises we have made to our clients – both today and tomorrow.
I’m happy to report that FMG’s after-tax profit of $76.7 million is a welcome improvement in performance after 2022/23 record loss of $17.5 million. Much of that loss was attributable to the uncontrollable forces of nature that manifested in Cyclone Gabrielle and the Auckland Anniversary Weekend floods. Somewhat ironically, it is the combination of uncontrollable factors once again (i.e. no catastrophe claims events and over-performance in investment markets) that has helped to reverse the position and has contributed to FMG’s strong profit performance. The underlying business of FMG also remains in very good shape.
Achieving a strong profit enables the Mutual to restore Members’ capital that was eroded as a result of last year’s loss. It also stands FMG in good stead to continue meeting claims arising from events like Cyclone Gabrielle, which are expected to increase in frequency and severity in the future. You can read more about our full financial results in our Annual Report available here.
FMG’s Vision is to ‘help build strong and prosperous rural communities’, and consistent profitability over the long term plays a critically important role in helping to achieve that outcome. As a mutual, FMG must create and sustain our own capital to support continued growth and deliver to our Purpose of ‘a better deal for rural New Zealand Aotearoa’. We do this by providing continued access to appropriate and competitive insurance solutions and quality risk advice. Every dollar of profit
FMG makes is reinvested back into the Mutual, ensuring we’re able to pay claims, both now and into the future, and assisting FMG continue support over 700 events and sponsorships across rural New Zealand Aotearoa every year.
FMG was once again a proud supporter of the FMG Young Farmer of the Year Contest (our ninth consecutive year as Principal Sponsor) which you can read more about on page 14. FMG also continues to support rural wellbeing through our association with Farmstrong, which is approaching its tenth year, and via our partnership with Melanoma New Zealand.
I am acutely aware that the announcement of our result comes at a challenging time with tough economic and trading conditions being experienced by many across the rural sector, particularly those in sheep and beef with on farm profitability still a major concern. Winter is also presenting challenges across large parts of the country with drier than normal conditions placing additional pressure on many farms due to feed levels. Our client facing teams remain committed to doing all we can to help find tailored insurance solutions and provide meaningful risk advice to assist those who are currently finding it particularly tough.
My hope is you will view our financial performance as an assurance that your mutual insurer is in a healthy position, capable of continuing to look after you when the unexpected happens. Part of that involves FMG being a sustainable mutual, whether that be economically, environmentally, or socially. Sustainability is also a key theme featured in this edition of FMG Post as we take a look back at the financial year that’s been and how everyone across our ‘One Team’ at FMG have been focused on making sure that FMG is ‘Here, there and everywhere’.
I’m pleased to share that FMG has now closed 98% of claims attributable to Cyclone Gabrielle and the Auckland Anniversary Weekend floods, investing $295.7 million dollars back into rural and provincial communities to help people and the sector get back on their feet. We’re hopeful that this support goes some way to ensuring that the food and fibre sector remains a cornerstone of New Zealand Aotearoa’s economy, given the significant value it delivers for the country, forecast to climb to a record breaking $58.1 billion in the year ahead.
Your contributions on farm and in the orchard play a pivotal role in the nation’s wellbeing and prosperity and FMG takes great pride in standing alongside you, ready to tackle the opportunities and challenges ahead, together.
On behalf of the Executive Leadership Team, I would like to extend our heartfelt collective thanks to all of FMG’s Members and clients for your support and the continued confidence you place in the Mutual. We would not be here without it. I would also like to express our special gratitude to Dr Jolene Germann, who has set an exemplary standard as FMG’s inaugural Associate Director. Jolene has been an invaluable asset to the FMG Board, and we wish her the greatest success in her future governance career.
Lastly, as we bid farewell to Director Debbie Hewitt, I would like to acknowledge Debbie’s dedicated service and contribution to the FMG Board. Thank you/ngā mihi nui Debbie and we wish you all the very best for the future.
Kind regards / Ngā mihi,
