The furore around the Maria Bailey ‘swing gate’ case helped the public understand the costs bearing down on the insurance industry — but the Government will too quickly forget the lessons over insurance claims and high legal costs, according to FBD boss Fiona Muldoon.
Ms Muldoon was talking after FBD — one of Ireland largest insurers — said net profit more than doubled to €33.8m in the first six months from a year earlier, even as the overall amount of premiums it had written had fallen back to €189.7m.
Defending the profits surge, the group chief executive said the earnings hadn’t been generated from price hikes but reflected one of the most benign winters in recent years, as claim payouts had fallen substantially.
Ms Muldoon said insurers like FBD had to make profits to build reserves and to insulate themselves from the inevitable repeat of winter storms such as 2018’s Storm Emma and a rise in claims in future years.
On Ms Bailey, who had withdrawn a claim for personal injuries against a hotel, Ms Muldoon said she felt some personal sympathy over the way the Fine Gael TD had been “vilified” because she is a public representative but that, nonetheless, “the case was interesting” for highlighting many issues around the insurance industry in Ireland.
“It has helped public awareness but it has not helped in any substantive way,” Ms Muldoon told the Irish Examiner, adding that she felt the case would soon be forgotten.
She said the Government, in seeking reforms over the costs of claims, had chosen not to cap the level of claims and that any changes would be a long time coming.
She said the insurance industry was itself “vilified” as it returned to profits.
Asked if FBD’s profits opened it to the charge of ripping off customers, Ms Muldoon said the insurer was in common with the rest of the industry, having returned to the black by cutting costs, exiting business lines, and “undoubtedly” also after it had increased premiums.
She said FBD’s latest set of earnings did not include price increases and that “pricing pressure” was bearing down on FBD even though claims amounts had fallen from levels of the previous year.
Shares in FBD rose 2.7% to pare its losses over the past year, valuing the insurer at around €342m.