1. AJ Buono
Ethan Foster
Elizabeth Clarke
Nicholas D’Orazio
Jennifer SantaMaria

2. FM at a glance
• Mutual insurance company domiciled in Rhode Island
• Global commercial & industrial property insurance
Operations spanning 130 countries
PHS in excess of $10 billion
• Known for engineering-driven UW
Loss prevention & loss control
Value proposition
• Narrow focus → large market share

3. History
● Zachariah Allen
○ 1848: Rhode Island Mutual
○ Years later: Factory Mutual
● 1874: Supported creation of fire sprinkler
● 1878: Collective Inspection Unit is formed
○ Inspection, appraisals, adjustments, loss analysis and research activities
● 20th Century: began expansion to other markets
● 1999: Merged with 3 other entities to create FM Global
○ Allendale Mutual, Arkwright-Boston Manufacturers Mutual, Protection Mutual

4. Structure
● AFM
○ Commercial property for mid-size businesses
● FM Approvals
○ Certifies products and services for companies
● FM Global Cargo
○ Comprehensive cargo coverage
● Mutual Boiler Re
○ Boiler Reinsurance
● Emergency Response Consultants
○ Emergency response for fire brigades, hazardous material emergency responders, technical and
confined-space rescue teams, emergency medical services and local fire departments.

5. Key Executives
● Thomas A. Lawson- President & CEO since 2014
○ On the Board of the National Fire Protection Association & Member of National Society of
Mechanical Engineers
○ Graduated from Illinois University with Degree in Occupational Safety
● Shivan S Subramaniam- Chairman (Former CEO from 1999-2014)
○ Degree in Mechanical Engineering from a University in India
● Jonathan Hall - Executive VP & COO since 2014
○ Degree in Management
● Backgrounds in Engineering and various safety programs contribute to FM
Global’s superb engineering expertise & inspection and loss prevention services

6. Board of Directors
• Members of Board are in high leadership positions at their various
companies/organizations
Disney, MLB, GlaxoSmithKline, USAA, RR Donnelley, Caterpillar, etc.
• Many clients sit on Board of Directors, advisory boards, risk management
councils
o Ex. Edward Rapp, Group President of Construction Industries at Caterpillar (one of FM
Global’s largest clients)
o Beneficial to hear client needs firsthand at board meetings
o Contributes to long-term partnerships with clients → 95% retention ratio in 2015
• Out of 13 board members, only 2 are women

7. Mission
“We have a unique risk management focus. Our clients look to us to develop cost-
effective insurance and risk-financing solutions, to minimize business interruption
and financial impact if a loss does occur.”
Meet these needs with customized programs that draw upon:
State-of-the-art loss prevention engineering and research
Risk management skills and support services
Tailored risk-transfer capabilities
Superior financial strength

8. FM in the Industry

9. Products / Services
Products
● All Risk Property Coverage (FM Global Advantage Policy)
● Business Interruption Coverage (Time Element Select Policy)
● Sustainability Coverage (Sustainability Select Policy)
● All Risk Boiler and Machinery Coverage
● Customized Cargo Coverage (as standalone or with risk policies)
Services
Site Evaluations
Unique Cargo Risk Engineering Services
Risk Quality Benchmarking (RiskMark, Engineering Data Reporting Tools)
Project Planning
Client Training
Supply Chain Risk Management
Product Certification

10. FM Global Advantage All-Risk Property Policy
A product designed to keep your business “resilient”
Includes:
Coverage for Scheduled, Misc. Property, and Business Interruption
● Expanded coverage for Cyber, “Cloud” Services, & options to expand coverage
to suppliers through Contingent Time Element and Logistic Extra Cost options
Benefits:
Maximizes risk transfer and improved contract certainty
The ability to scale the policy to fit your needs

11. Supply Chain Risk Management
Available through FM Global Advantage
Expert risk assessment
Extend coverage through suppliers’ suppliers
Global Resilience Index
Ranks resilience of 130 countries
Prioritization & insights

12. Customers
Core strength is forming long-term strategic partnerships with clients
FM seeks customers that view risk management as an investment
Large commercial companies
95% customer retention rate
Major customers include: Caterpillar, Modine, Mercy and HSN

13. Premium

14. Underwriting Results
Loss Ratio
Year FM CB TRV ZURN
2010 51% 58% 61% 71%
2011 95% 64% 73% 72%
2012 60% 64% 65% 70%
2013 51% 54% 58% 68%
2014 50% 55% 58% 67%
AVG 61% 59% 63% 70%
Expense Ratio
Year FM CB TRV ZURN
2010 28% 31% 32% 27%
2011 25% 32% 32% 27%
2012 24% 32% 32% 28%
2013 28% 32% 32% 30%
2014 26% 33% 31% 31%
AVG 26% 32% 32% 28%
2011 - Natural hazard losses added ~53 points to combined ratio
2012 - Sandy added ~13.5 points to combined ratio

15. Profitability
• Driven by strong underwriting
• Investments
Inv Yield 2.2% vs Industry 2.7%
Inv Inc Growth 3.9% vs Industry -2.9%
Fueled by growth in invested assets
• Membership credits
2014 ~$465 million
7th credit since 2001

16. Risk Profile
• BCAR 378.6 & RBC 439%
AM BEST “A+” ; Fitch “AA” ; S&P “A+”
• High deductibles & attachment points
• No debt issued
• Elevated common stock leverage
• Facultative
Coverage requirements outside UW criteria
• Excess-of-loss
$1.23 billion X $250 million per-risk retention
$1 billion X $500 million per-CAT retention
• Berkshire Hathaway & Swiss Re
~16% of ceded premium
Reinsurance Program

17. Reserves
• Less reserving risk relative to peers
o Short-tail nature of risks
o Develop into paid losses within 3 years
o Favorable AY development
Gg
• Asbestos & Environmental
o Discontinued reinsurance operations
o 27% of total reserves ~$650M
o Chubb ~$478M ; SR: 6.9

18. Reserves
● Driver: discontinued reinsurance operations
○ A&E exposure

19. Strengths
• Non-Traditional Business Model
Prevention is first priority
• Underwriting
61% loss ratio
• Expense management
26% expense ratio
• Customer retention
95% retention
• Well Capitalized
Able to absorb losses and volatility
$10 Billion PHS

20. Weaknesses
• CAT exposure
Volatile underwriting results
• A&E exposure
Continuous unfavorable development
• Property-only focus
Contributes to undiversified book of business

21. Opportunities
• Data analytics
Exploit data to drive new business & cross-selling
• Supply chain & cyber
Utilize FM Global Resilience Index
• Emerging markets
8-9% expected growth
Emerging Asia: ~12% expected growth

22. Threats
● Competition
○ Risk-engineering
○ Line bundling
● Global environment
○ Macroeconomic
○ Political
● Foreign exchange
○ Impact of strong $USD
○ Foreign currency translation
■ ($126 M) in 2015
● Insurance regulation

23. Strategic Priorities

24. 1. Grow business with existing customers

25. 2. Access new & emerging markets through data

26. 3. Continue excellence in research
• Research sets FM apart
• Crucial to continue innovating and investing
• Large companies could imitate their business strategy
AIG
Chubb

27. Today → Tomorrow
• Currently positioned well in the market
Excellent performance
Market share
Retention
• Looking ahead
Grow with existing customers
Access emerging markets
Continued excellence in research → solidify FM as the premier commercial property insurer

28. Questions?