US mutual property insurer FM Global has announced a $132m (£92m) net income loss for 2001, despite recording its highest ever influx of new business.

The insurer attributed much of the loss to the World Trade Centre (WTC) tragedy, in which it lost four employees, and the return of $237m (£165m) to its policyholders as a membership credit from merger savings.

WTC cost FM Global $252m (£175m), the single largest loss in the company's history.

It was also hit by natural hazards such as the Nisqaully earthquake and tropical storm Allison.

But the insurer decreased its expense ratio from 39.8% to 31.6% and its risk losses were the lowest in six years.

Its policyholder retention rate went up from 86% in 2000 to 97% in 2001.

Gross premium in force rose by 46% from $1.4bn to $2bn, with about half the increase coming from new business