FBD operating profits decline

Insurer FBD today reported full-year operating profits of €28.9 million as against €65.8 million in 2008.

The group said pretax losses totalled €34.6 million compared to a deficit of €38.6 million in 2008.

FBD, which is Ireland's second largest non-life insurer, said earnings per share fell to 75 cents from 172 cents a year earlier.

Operating profit in FBD's primary underwriting business was €22.4 million while non-underwriting operating profit was €6.5 million.

The group said profitability in the underwriting business declined because of lower premium income as a result of the reduction in economic activity, a decision by the company not to grow volume in certain areas at uneconomic rates, a deterioration in the loss ratio and a lower longer term investment return.

The group said severe weather had led to more claims during 2009.

"The cost of the unprecedented flooding and freeze incidents in November and December are far in excess of any previous weather related event in the Irish market," it said.

The 2009 cost to FBD as a result of weather-related claims was €13.5 million.

"FBD delivered a solid operational performance in what was a challenging year for both the insurance industry and Ireland's economy," said group chief executive Andrew Langford in a statement.

"Against a background of unprecedented levels of weather related claims and an uncertain economic environment, FBD's underwriting discipline and prudent reinsurance policy protected the group's operating results, its capital base and solvency. At the same time, the group made significant progress in advancing its strategic priorities," he added.