FBD insurance reports record profits of €87m
The half-year interim results show excellent growth performance, claims down by €8m and an increase of 29% in profit to an all time record of €87m for the half year.
The company was founded on the foresight of a small group of people, largely headed by the far seeing and inspirational Dr Paddy O'Keeffe, the NFA, and supported by thousands of committed farmers all over the country. From small beginnings it has grown to be a major force in the insurance industry in this country.
The founding leaders and those who then supported the project have reason to be very proud of the success which has grown out of the smallest of seeds of co-operative endeavour which has developed into a major plc with one of the best performing shares on the Irish Stock Market this year.
The cash-rich company, founded by farmers to serve the best interest of farmers in providing insurance cover, is on target to record profits of between €2.5m and €3m per week for 2005.
The board has decisions to make. The most crucial is whether they continue to boost the plc objective of increased profits, boosting the share price, at the expense of premium reductions. There is increasing danger that the ethos upon which it was founded as a farmer co-operative will be forgotten. Premiums (some sectors) have been reduced.
Examination of the available information makes it difficult to establish full transparency. Premiums on some sectors of farmer insurance have not been reduced in recent years. Trying to extract from the company, precisely where the reductions were given on premiums in recent years, and by how much, has drawn jargon similar to that of the conditions attaching to insurance policies. That is not good enough.
Boosting the share price with higher profits will serve the large investors, mostly institutions. Benefiting farmers with lower insurance premiums will recognise the founders of the company and their successors, many of them very small shareholders, but without whose support in the lean founding years for FBD, the company would never have been born.
