FBD posts surge in profit as group pays out another €36m to shareholders

Insurer's pre-tax profit grew by 24% in 2023 to more than €81m

FBD Insurance, South Mall, Cork. Picture Denis Minihane.

Insurance firm FBD posted a surge in profit last year with the firm benefiting from continued growth in insurance revenue coupled with positive investment returns which will see €36m paid out in regular dividends to shareholders for a third consecutive year.

The dividend comes on the back of a "robust" year for the insurance firm, with pre-tax profit in 2023 growing by 24% to more than €81.4m. 

The surge was largely driven by FBD releasing more than €44m in reserves initially set aside for claims, and investment returns exceeding €19m, up significantly from a loss of more than €10m in the previous year.

Gross written premiums rose by 8% to €414m, with more than  70% of the increase coming through from farmer and business customers.

The group's commercial business average premium increased by 5.3% driven by a combination of construction cost inflation and customers' increasing liability cover levels. 

FBD's private motor average premium increased by 2.9% and commercial motor increased by 3.6%, with rate increases applied to offset the increased cost of motor damage claims stemming from inflation in labour, parts and paint costs and the higher costs associated with repair and replacement of advanced technology on newer vehicles.

Net of reinsurance weather losses in 2023 were similar to that in 2022. According to FBD, there was a higher frequency of named Storms in 2023 but a lower number of "attritional" weather events.

The Group's underwriting profit was €76m, down from €90m in 2022, with expenses remaining stable despite increases in employee, utility and IT costs due to inflation.

“Building on our successful approach to date to drive measured profitable growth, we are pleased to announce a robust result for 2023," said group chief executive, Tomás Ó Midheach.

"We are acutely conscious of the economic environment as inflation and interest rates increase costs with resultant impacts on our customers and our business."

However, despite inflationary pressures, the group CEO noted a positive outlook, adding that "looking forward, we remain confident in the underlying profitability, future growth prospects and capital strength of the business.”