FBD results - the key points

Mild winter helps the insurance group return to profit

27th February, 2017
FBD chief executive Fiona Muldoon Pic: Maura Hickey

Insurance group FBD announced a return to profitability last year, helped by a mild winter and a strong underwriting performance. Here are the key points from its 2016 results:

- The company reported a pre-tax profit of €11.4 million, including a once-off pension gain of €7 million, compared to a loss of €85.9 million in 2015

- Gross written premium was down by €1.5 million to €361.8 million and included a €15 million reduction in business written through brokers, offset by price increases in some products and strong retention of core customers

- FBD reported a "modest" full-year underwriting profit of €3.2 million compared to an underwriting loss of €125.4 million a year earlier, helped by the benign winter weather experienced so far this year

- The insurer said it was "well positioned to make further progress during 2017" but chief executive Fiona Muldoon warned that while it saw some degree of stabilisation in the cost of claims, "we believe insurance premiums in Ireland are and will remain high until structural claims reform is successfully executed"

- The company also warned about the impact of Brexit, noting: "It appears likely that Britain departing the EU will have negative effects for business and business confidence in Ireland, particularly in the medium term and the group believes this will continue to be a significant headwind to otherwise strong Irish economic prospects"

- FBD reported a full-year combined operating ratio of 99 per cent compared to 140 per cent previously and said it was targeting a continued steady improvement of the ratio to a range in the mid to high-nineties

- Average premium rate increases of nine per cent last year were offset by a five per cent decline in policy volume from direct operations but FBD said the loss of policy volume slowed during the year to four per cent in the second half from seven per cent in the first six months of 2016

- Net claims incurred fell to €217.5 million from €341.3 million in 2015

- FBD reported an annualised total investment return of 1.9 per cent last year compared to two per cent in 2015

- Expenses fell by €6 million to €79.7 million while its expense ratio dropped to 25.9 per cent from 27.4 per cent, largely due to a reduction in staff costs as a result of a voluntary redundancy programme

- Shares in FBD were unchanged at €8.20 by 10:30 a.m. Merrion Stockbrokers said the results were better than expected while Davy welcomed the company's return to underwriting profit. "Solvency is within FBD’s target 110-130 per cent range. More detail on solvency is expected in May 2017 which should help assess dividend resumption prospects," Davy said

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