FBD Holdings, the agricultural insurance group, has increased profit before tax by 20.9 per cent to £9.4 million in the six months to June 30th, 1998, reversing last year's slippage. However, growth in the second six months is likely to be slower.

In common with other motor insurers, FBD stresses the need for higher motor premiums.

"The stock market turmoil of recent days, coupled with anticipated lower interest rate income, highlights the need for economic premium levels to counter adverse underwriting experience", said chief executive, Mr Paul O'Callaghan. He also highlighted the increased number of accidents, particularly among younger drivers with much larger claims.

FBD increased the basic premium on motor insurance by 4.5 per cent last February. There is unlikely to be another increase until next February, but some categories may be raised before then.

FBD does not break down the various accounts at the half way stage, so the impact from motor insurance is not quantified. However, Mr O'Callaghan said the underwriting losses are higher. Gross premium income rose by 5.9 per cent to £58.6 million in the first half. However, the company noted that in common with the experience in the industry generally, underwriting results show a deterioration. This deterioration, he added, arose largely on the motor account.

"We remain very focused on implementing our growth plans", he said. The branch network is being extended and its product range enhanced. Also, the customer base is being broadened and it is developing its capacity to cope with demands. FBD reckons it has around 8 per cent of the Irish general insurance market and this should be increased to 12 per cent by the year 2003, said Mr O'Callaghan.

FBD would have recorded a drop in pre-tax profit but for the increased in realised gains on investments from £1.8 million to £4.25 million. Also, other income went up from £1.47 million to £3.52 million. This arose from non-underwriting activities, including insurance/assurance broking, IFSC-based financial services and property investment. Earnings per share rose by 34.6 per cent to 20.6p while the interim dividend is being raised by 18.6 per cent to 4.45p.