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Rising claims hit FBD's pre-tax profits

Tuesday, August 26 10:08:29

Rising claims costs, especially those related to extreme weather conditions, hit general insurer FBD's pre-tax profits in its half year to the end of June.

The company posted a pre-tax profit of E3.27m in the period compared to E19.1m in the same period a year before despite gross written premiums that rose to E184.9m compared to E175.9m in the same period a year earlier.

It said that the drop in profitability was "primarily due to an increased cost of severe and persistent weather and increased frequency of car insurance claims".

FBD said E44.3m was spent by the group on 9,000 claims relating to last winter's storms, while mid-February's Storm Darwin is likely to cost the company E30.4m in claims.

These weather-related costs are the highest in FBD's history, according to the group.

In its results the company did report a rise in the value of its gross written premiums during the six months, however, up 5.1pc to E184.86m.

It also predicted growth in the Irish insurance market this year following eleven years of decline.

Commenting on the results, Andrew Langford, Group Chief Executive, said: "These are robust results in a period significantly influenced by weather and an increase in claims frequency across the Irish car insurance market. In this period, we have worked tirelessly to put things right for over 9,000 customers directly impacted by the severe weather, at a cost of E44.3 million. Our strong position and continuing investment in the Irish market delivered further growth in premium and market share. The increased interim dividend delivers on our commitment to a progressive dividend policy and reflects our confidence in our strategy for the future."

FBD maintained its earnings forecast in the 70-80c per share range, subject to there being no more "exceptional weather events" during the year.