FBD sees profit fall as expenses surge by more than €37m

Group said increasing frequency and inflation in motor damage claims costs and weather contributed to the matter, with motor damage settlements increasing by 10 % year-on-year

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

FBD Insurance saw profits drop by more than €7m in the first six months of this year, with a rise in written premiums offset by a surge in insurance service expenses.

Publishing its half-year results on Friday, FBD posted a pre-tax profit of €32m in the first half of this year, down from €39m in the same period in 2023. 

The insurer's gross written premium rose by 10%, totalling €226m, however, its underwriting result, the share of earned premium retained after losses were paid out, fell by nearly €10m in the first half of this year. 

FBD paid out more than €129m in insurance service expenses between January and June this year, reflecting a more than €37m increase compared to the same period in 2023.

The group said that “increasing frequency and inflation in motor damage claims costs and weather” was contributing to the matter, with motor damage settlements increasing by 10 % year-on-year following “double-digit” increases seen in recent years.

Storms and adverse weather brought property claim notifications up by 29% in 2023, while the average cost of property claims rose by 8%.

Despite the surge in service expenses, Tomás Ó Midheach, FBD Group chief executive said the business "continued to grow," adding that its customer strategy "has established a strong momentum, as seen in the increase in the number of new customers over the period and in the retention rates of our loyal customers."

"I am pleased to announce a strong, consistent performance from FBD for the first half of 2024 as the business continued to grow over the period across all customer sectors."

The group reported a 12% annualised return on equity, compared with 15% in the first half of 2023, while its combined operating ratio rose from 81% in 2023 to 88% in the first six months of this year.

The group’s cash from operations saw strong growth however, rising from almost €16m last year to €23m, underpinned by a near-doubling of interest and dividend income totalling €11m.