FBD shares rise 4% as insurer sets aside €30m for potential business disruption costs 

FBD shares rise 4% as insurer sets aside €30m for potential business disruption costs 
A branch office of FBD Insurance near Baggot Street Bridge,Dublin, Ireland.FBD is a general insurer.

Shares in FBD rose 4% as the insurer set aside €30m to take account of the losses should it lose a court challenge over business disruption insurance. 

The insurer has also poached Tomás O’Midheach from AIB as its new permanent chief executive to replace Fiona Muldoon and reported Covid-19 linked losses which were less than analysts' had once feared.

The pre-tax loss of €9m in the six months to the end of June compared with a profit of €39m a year earlier as gross written premiums fell 7% to €176m.

However, the fall in premiums was pegged back to a decline of only 1% when the Covid-19 rebates it paid back to customers were included.                                    

"On-going uncertainty surrounding the Covid-19 pandemic related business interruption claims, which are subject to legal proceedings, with best estimate costs of €30m included taking into account the most up to date information in assessing the expected costs and probability of occurrence of potential outcomes," the insurer said. 

Covid-19 Business Disruption

FBD has been under severe scrutiny from customers as well as its Central Bank regulator as it claims its business interruption policies should not cover closures of large parts of the economy as entailed by the Covid-19 pandemic. 

Publicans say that they have paid for business interruption insurance and that that FBD should pay out. 

"We have experienced a lot of publicity in recent months regarding business interruption claims by customers," the insurer said. 

We acknowledge the disappointment and frustration of affected businesses that their Business Interruption insurance does not respond to cover pandemics. 

However, we are unable to provide cover for what we believe to be, and are advised is, an uninsured risk not covered by our policies," it said. 

The legal dispute is set for a hearing this autumn.     

The 4% rise has cut back the losses for FBD shares to 30% in the past year, to value the insurer at €232.7m.

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