Storms set to cost insurer €4m-€5m in claims

December’s stormy weather is set to cost leading insurer FBD between €4m and €5m in additional claims.

The company said yesterday that this will reduce both its basic and operating earnings per share for last year by 10%-13%.

In November, the group guided for full-year operating earnings per share of between 145c and 155c, based on the assumption that previously seen large claims trends would revert to more normal levels and the remainder of the year would not see any “exceptional weather events”.

However, FBD amended that outlook in a brief statement yesterday following the effects of the storm-force winds seen across the country during the second half of last month.

Ireland experienced storm force and, in certain areas, hurricane force winds between 19 and 31 December.

The bad weather is likely to cost the insurance industry, as a whole, between €30m and €40m in additional claims, considerably less than in recent years — in 2010 alone, the sector faced up to costs of €520m.

Yesterday’s statement, however, also stressed that FBD’s management remains confident of meeting pre-tax profit and basic earnings per share market expectations in its 2013 annual results, which are expected to be published in March.

The operating earnings per share are now expected to come in at between 135c and 140c.

The group’s investment returns for the year as a whole were better than anticipated, according to the update, “due to a strong performance in the group’s equity book through the end of the year”.

According to Colm Foley of Goodbody Stockbrokers: “The improved performance from investments means there will be no material change to forecasts for 2013, but we are likely to see a further hardening of rates in 2014 where we currently have a 0.5% increase forecast for next year.”

FBD’s share price was down by just under 2% yesterday, at €17.55, after rallying from slightlyhigher losses earlier in the day.