FBD gave €50m in big freeze pay-outs

FBD is not planning any premium hikes despite paying out €50 million as a result of the big freeze and the floods last year.

However, the chief executive of FBD Andrew Langford said he expects some companies will hike motor insurance premiums in the near future.

FBD reported a first-half pre-tax loss of €7.8m which narrowed significantly from €21.7m on a year earlier.

The company expects to report a profit next year barring exceptional claims events. Its expectations are in line with analysts who expect the group to deliver 2010 operating earnings per share of 95 to 100 cent. The shares closed down less than 1% at €6.94.

Mr Langford said that revenue in the insurance market was likely to be flat or slightly higher this year after eight years of falls.

He said that the money paid out on the floods last year and the big freeze at the start of this year was a “very substantial” amount. He said the insurance industry paid out €540m on the weather-related incidents.

The country’s largest insurance company, Aviva Ireland, said earlier it will pay out a record €100m to 4,500 customers affected by the floods and freezing conditions.

Mr Langford also said that FBD has no immediate plans for any further staff cuts or branch closures.

FBD’s results were also affected by writedowns of €17.7m in the value of assets, mainly hotels.

Stephen Lyons of Davy Stockbrokers said the valuation adjustments are disappointing and the hotel and leisure division will continue to weigh on the outlook for the group.

“However, the adjustments do not affect insurance solvency and are cashless, so we do not believe they will impact on dividend policy where we believe there is an opportunity for increased payout,” he said.

NCB Stockbrokers said they were are a solid set of interim results from the group with solvency levels stronger than expected, highlighting “the resilience of the FBD franchise”.

According to FBD’s first half results its net loss attributable is to equity holders was €6.46m or 22.15 cents per share, narrower than €20.56m or 61.40 cents per share in the prior-year period.

Operating profit for the period declined to €9.84m from €11.63m in the same period last year. Its market share dropped from 11.6% to 11.5% from last year.

The firm increased its interim dividend to 10.5 cents per share, which will be paid October 1, 2010, to the holders of shares on the register on September 3, 2010.

More in this section

IE_180_logo
Price info

Subscribe to unlock unlimited digital access.
Cancel anytime.

Terms and conditions apply

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up