FIONA REDDAN

The increased cost of severe and persistent weather saw pre-tax profits slide by 83 per cent FBD Holdings in the first six months of the year, down to €3.3 million, as the company put the cost of January and February’s storms at € 44.3 million. Looking to the full year, the insurer re-affirmed its earnings per share guidance at 70 - 80 cent per share, “subject to no further exceptional weather events arising”.

Andrew Langford, group chief executive, said it was a "robust" set of 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 € 44.3 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,” he said.

The cost of severe and persistent weather in the six months to June 30th 2014 was € 44.3m, gross of reinsurance, and € 15.3m, net of reinsurance. An increase in car insurance claims frequency arising from a sharper than expected increase in Irish economic activity, also hit the insurer. Net claims incurred increased to € 117.9m (2013: € 100.6m) and, as a result, the loss ratio increased from 68.8 per cent to 79.5 per cent. Severe and persistent weather and large claims accounted for 26 per cent of earned premium compared to an average of 16.5 per cent for the previous seven years.

Business grew for the insurer, with gross written premium up 5.1 per cent to € 184.9 million. According to FBD, growth was achieved across all customer segments, further increasing the group’s market share. Average premiums increased by 3.1 per cent and policy volume increased by 2.0 per cent.

The insurer recorded an annualised investment return of 3 per cent, while its capital base was further strengthened with a solvency level of 73.4 per cent, compared to 69.7 per cent at June 30th 2013.

FBD announced an increase in its interim dividend, up to 17 cent a share.

Looking to 2014, FBD said that the Irish insurance market is likely to grow following eleven consecutive years of decline.

“The group is well positioned to continue to outperform the market. Growth in the second half is more likely to come from rate than volume as the group ensures that car premiums reflect increasing claims frequency.”