FBD expects solid results for 2010

GENERAL insurer FBD says barring unforeseen circumstances 2010 will deliver solid results.

Unless it is hit by exceptional claims for the rest of the year, it is confident of delivering full-year 2010 operating earnings per share of 105-110 cent a share.

The group expects to deliver operating profits in both its underwriting and non-underwriting businesses in 2010, it said in a trading update yesterday.

FBD Holdings said it has maintained its “solid” trading performance and is seeing strong operating profits so far in the second half, against a difficult market environment.

While the outlook for the group is promising, oversupply in the marketplace is the key challenge facing the property and leisure businesses here, but sales in its La Cala development in Spain continue to beat expectations.

Its property and leisure businesses in Ireland and Spain have delivered operating profits and cash flows in the second half of 2010, but it noted that over-supply in the marketplace is a key challenge and market capacity must reduce.

The cost of premiums have continued to “harden” in the Irish insurance market, especially for home and business insurance. In line with the country’s economic profile, it said its insurable risk and values have continued to decline.

General insurance rate increases have been imposed to provide the industry with an adequate return of capital, particularly after the unprecedented severe weather claims after the flooding and big freeze last winter.

Despite genuine consumer sensitivity to those higher premiums, FBD said the rate increases provide the industry with an adequate return on capital, given the unprecedented nature of the severe weather claims.