Premium cuts help push FBD profits up

FBD’s insurance premium cuts helped push pre-tax profits up 315% to a record €104.56m for 2003 (from €25.17m in 2002) and the company says it will give customers more reductions in 2004.

FBD Holdings, the largest Irish-owned provider of property and casualty, life, commercial, and health insurance in Ireland yesterday reported profits, for the year ended December 31, 2003, well ahead of expectations.

FBD chief executive Philip Fitzsimons said 2003 was a very good year for FBD shareholders and FBD customers. “The underwriting loss trend of previous years was reversed and the turnaround to profit enabled significant premium reductions to be given to a wide range of policyholders. This will result in annual savings in excess of €30m for customers.

“The indications are that the underwriting experience will continue to be favourable and, consequently, customers can anticipate further premium savings.”

Mr Fitzsimons said it is essential that all interested parties maintain momentum in implementing the claims reform agenda to keep insurance premia down.

The company said all of the group’s business divisions, including insurance underwriting, financial services and property/leisure, delivered improved performances in 2003, with FBD Insurance producing particularly strong results.

FBD Insurance operating profit grew to €93.7m (2002: €25.3m).

“This result is attributable to the considerable improvement in underwriting performance which recorded a turnaround from losses of €5.3m in 2002 to a profit of €59.3m in 2003. This turnaround was achieved across motor, liability and property classes of business and is most welcome against a background of underwriting losses in the previous years,” the company said.

Two elements combined to deliver the underwriting figures: growth in net earned premiums from €240.3m to €290.3m and a fall in claims incurred from €220.5m to €194.1m.

The company made underwriting profits of €32m in 2003, after accumulated losses of €140m over the previous five years.

“The reduction in claim costs reflects a fall in both the incidence of personal injury claims and, also, the lower than anticipated settlement and award levels that have emerged over the past 12-18 months in motor and liability claims,” the company revealed.

Operating profits in the group’s property and hotel/leisure division were €12.6m. (2002: €8.9m).

“We are confident that we will maintain good growth momentum in all of our business activities this year and in the years ahead. We are on course to achieve our targets and objectives.”