HIGHER investment gains FBD Holdings, the agri-insurance group, push its pre tax profit up by 13 per cent, from £6.1 million to £6.9 million, in the six months to June 30th 1996.

This growth was achieved despite increased underwriting losses, particularly on the motor and public liability businesses. The underwriting losses increased from £2.9 million to £4.5 million.

Motor accounts for around three quarters of this with public and employers' liability accounting for the remainder.

In line with the industry's experience, FBD, which is chaired by Dr Patrick O'Keeffe, had to contend with higher average cost of claims, together with an increased frequency of claims. Echoing the concerns of others in the industry, FBD said the present pricing policy was unsustainable. Noting the intense competition and premium price cutting in the industry, FBD said it had "maintained a consistent approach" in its pricing policy. This, it stressed, was borne out by the increase in its customer numbers, reflected by the 8 per cent rise in premium income for the half year.

Deputy chief executive, Mr Philip Fitsimons, said the number of customers increased by 3 to 4 per cent. Increased premiums would have helped revenue with most insurers moving to comprehensive insurance. The higher retail price of cars also benefited premium income.

Asked about further price increases in motor insurance, lie noted that FBD had made its "adjustments" earlier in the year. While no further price increases were imminent, the trend was upward, he said.

Investment income rose from £8.8 million to £11.7 million. This consists of dividends, interest income and realised gains. The realised gains rose from £900,000 to £2.8 million in the first half. There were unrealised losses on investments of £300,000, contrasting with unrealised gains of £1 million. These were included only in the balance sheet.

FBD's technical underwriting account showed a reduction in profit from £4.8 million to £3.5 million. This, FBD noted, reflected increasing underwriting losses. Other income fell from £1.59 million to £1.16 million.

Turnover rose from £65.8 million to £69.1 million in the first half. Earnings per share have risen from 11.46p to 13.16p. Shareholders are to receive a higher payout with a rise in the interim dividend from 2.9645p to 3.35p. Reflecting the higher profits, net assets per share have improved from 130.90p to 156.22p.

On the future, FBD said it had shown a capacity to grow sales and profits in the highly competitive market. It is confident that this trend will continue.

Growth, however, is expected to be slower in the second half. The shares up 5p at 210p (12 month high 215p low 180p) are on a prospective price/earnings ratio of 7.5, assuming earnings per share rise from 26.6p to 28p.