Hotel and leisure sector behind FBD's 70% jump

Insurance group FBD Holdings has reported a near 70 per cent jump in interim pre-tax profits driven by a strong contribution from its hotel and leisure business and a much lower provision for uninsured drivers compared with the first half of last year.

The firm continued to feel the adverse effects of lower global equity markets in the half-year to June 30th, incurring a €3.2 million decline in investment return.

Profit before tax was €14.1 million, up from €8.4 million during the previous corresponding period. Operating profit was up to €17.3 million from €12.9 million. Operating profit from insurance and reinsurance was €10.7 million compared with €7.2 million previously, while operating profit from financial services dipped to €1.5 million from €1.9 million. The company's property and leisure interests in the State and Spain contributed €5.1 million to operating profit, up from €3.85 million.

The interim result was buoyed by a fall in charges paid to the Motor Insurers Bureau of Ireland (MIBI). In the first half of 2001, the company paid €6.5 million but during the six months to June 2002, €3.5 million was paid. The lower charges resulted in a much bigger provision by the MIBI for uninsured drivers last year.

FBD chief executive Mr Paul O'Callaghan said while the higher insurance premiums had been "catching the headlines lately", the insurance industry had been working to implement the 10 recommendations relating to it in the motor insurance advisory board report. "Nothing seems to have been done with any of the other recommendations," he said.

"It is now essential that the Government implements the remaining 57 recommendations at the earliest possible date as insurance premium reductions will ultimately depend on the national measures taken to reduce the level of claims settlements and excessive associated costs," he said.

"It is disturbing to hear in the past few days that the new computer system needed to implement in full the penalty points system will not be operational for at least another year," he added.