Rural Mutual Insurer FMG Posts Toughest Claims Year in 121 Years

New Zealand's largest rural mutual insurer, Farmers' Mutual Group (FMG), has reported its toughest claims year in 121 years, resulting in a significant surge in insurance service expenses. The company saw a 29.5% increase in insurance service expenses to $614.1 million, driven by four catastrophe-classified events and about $51.9 million in net catastrophe claims.

FMG's results stand in contrast to the broader market, where the Insurance Council of New Zealand (ICNZ) data shows an improved average combined ratio from 97.9% in December 2023 to 78.6% in December 2024. FMG's own combined operating ratio was 92%, and its capital position improved with a $69.3 million net profit after tax for the year ended March 31, 2026.

Regulatory costs are also adding pressure on rural policyholders, with the FENZ levy restructure taking effect on July 1, 2026, and extending the levy's scope to asset types previously exempt. The Reserve Bank of New Zealand (RBNZ) has also opened consultation on a proposed prudential levy, set at approximately $27.3 million annually across an estimated 66 licensed insurers.