FBD results ahead of expectations

FBD POSTED first-half results ahead of expectations yesterday, although it said it would have limited opportunity to grow premiums in the second half of the year as domestic demand continued to decline.

The insurer reiterated its full-year earnings-per-share guidance of between 145 cent and 155 cent, posting pretax profits of €22 million for the six months to the end of June. During the period the company wrote off its €2.6 million investment as a limited partner in Bloxham stockbrokers, which collapsed earlier this year.

This, together with €700,000 in restructuring costs and €2.4 million fluctuations in short-term investment returns – a result of low interest rates – pushed FBD’s pretax profit back to €22.2 million. This compares to a figure of €21.8 million the previous year.

Gross written premium stood at €174.7 million for the period, 1.6 per cent lower than the previous period, though FBD chief executive Andrew Langford noted that the overall insurance market had fallen by about 6 per cent during the period. “We continued to increase our market share this year, both through a widening of our customer base and the strengthening of some of our core businesses. We’ve added 1,000 new farming customers since the beginning of the year, for example.”

FBD now holds an estimated 12.5 per cent of the insurance market, he said.

Net earned premium increased by 0.7 per cent to €150.9 million mainly due to growth in areas where the company retained greater risk.

FBD’s combined operating ratio – a key indicator for the insurance industry – was 92.2 per cent, an improvement on the 92.8 per cent recorded the previous year.

On the investment side, cash deposits accounted for 56 per cent of FBD’s assets at the half-year point, with 28 per cent in government bonds.

Almost half of its sovereign bonds matured during the period. Since then the company has bought short-term bonds, including €50 million of Irish Government bonds in the National Treasury Management Agency’s July auction, representing 10 per cent of the total issuance.