No change for FBD earnings forecast

HAVING considered current trading conditions, FBD Holdings sees no reason to change its earlier earnings forecasts for 2011.

In a statement issued prior to yesterday’s annual general meeting, the group said: “Unless exceptional claims events arise during 2011, the board reiterates its previous guidance that the group will deliver full-year 2011 operating earnings per share of 130 cent to 140 cent.”

In the first quarter of 2011, the general insurer said the benefits of hardening rates were offset by the ongoing reduction in insurable risk and values, reflecting ongoing weakness in the economy.

Premium rates for home insurance continued to harden, while motor insurance premiums were flat.

In a tighter market, FBD said the market for underwriting large business risks had become more competitive and it refused to fight for business where premiums were uneconomic.

The group said in the first three months of 2011, its policy volumes were flat. But it was the first quarter without a fall in policy volumes in almost three years.

Overall gross premiums written were down marginally and the impact of rate increases was offset by reductions in policy cover and values and a change in product mix.

The frequency of property and motor claims reduced further in the first quarter of 2011 and large claims experience was positive. Company initiatives to reduce the cost of claims are ongoing.

Operating profit in FBD’s underwriting operations was ahead of the prior year and in line with expectations.

The group’s financial services businesses also continued to perform well.

FBD Financial Solutions delivered another solid quarter’s profits, ahead of the prior year in a weak market for retail investment and life assurance products.

Profits at FBD Brokers were also ahead of the prior year, the group said.