FBD could cut premia on foot of results

FBD Holdings’ car insurance underwriting losses have fallen 54% prompting company chairman Michael Berkery to predict a cut in rates in the medium to short term.

Addressing the company’s AGM yesterday Mr Berkery said the introduction of the penalty points system for errant drivers is working.

“FBD has seen a reduction in the incidence of claims. This is reflected in our motor results for 2002, where underwriting losses reduced from €22.3m to €10.2m.

“If this current trend delivers acceptable loss ratios, it is realistic to expect reductions,” said Mr Berkery.

In 2002 FBD took in €144m in motor insurance premia and paid out €136m in claims but operating expenses of €18m brought the overall underwriting losses to €10.2m.

However, FBD fared remarkably well on the investment front generating sufficient profits from the €144m in premia to offset the €10.2m in underwriting losses to end up with a net profit of €6.8m on its motor insurance business.

Mr Berkery welcomed the Government’s efforts to reduce road accidents which he said will reduce claims costs and have a positive impact on premium charges.

“While there has been some greater realism in recent personal injuries awards by the judiciary, the Insurance Industry is awaiting the impact of the Personal Injuries Assessment Board (PIAB) on reducing the overall cost of claims. To this end the establishment of the PIAB on a statutory basis is a priority,” he added.

In his address Mr Berkery said the growth in total assets to more than €1bn is a milestone for the company.

Mr Berkery also spoke on the group’s property and leisure activities in Ireland and abroad which contributing €9m to operating profit.

“In Spain the La Cala Resort and Sunset Beach Hotel delivered in line with expectations. In Ireland we increased our shareholding in the Tower Hotel Group from 50% to 75% and our results reflect its consolidation within the group.

“The Tower Hotel Group has six modern hotels, well located in Ireland and, despite the difficult tourism climate, reported a very good performance for the year,” he added.