FBD’s market share on the up

The insurance firm FBD reaffirmed full year operating earnings per share of €1.45 to €1.55 as well as growth in premium income and further market share gains, according to its latest interim management update.

There was an improvement in the company’s performance in the second half of the year. Gross written premiums grew 2% for the first nine months of the year, against 0.7% for the first six months.

“The group continues to outperform the market, which we estimate has declined by approximately 2% to 3% in the nine months,” it said in a statement.

Group profit after taxation for the nine months to September 2013 is in line with expectation, it added.

However, there was an increase in large accident and liability claims of over €1m in the first nine months of the year.

The company is advising that claims of this nature will be ahead of the historic yearly average.

“In contrast, severe weather experience has been benign year to date. The combined cost of severe weather and very large claims will fluctuate from year to year.

“In 2011 and 2012 for example it was well below a multi- year average — and the group’s decisionmaking process focuses on longer-term trends,” it added.

FBD had a reserving ratio of 240% at the end of September, compared with 232% at the end of last year. At the end of September, capital available was 71% of net earned premium, which represents 345% of the minimum solvency margin.

“FBD is well placed to profit from a resumption of growth in a market where some competitors have ceded share, auguring well for continuing net asset value growth and an improved payout to shareholders,” said Davy Stockbroker analyst, Emer Lang.