‘FBD profit is in customers’ interests’ – Muldoon
Following the announcement this morning that FBD has made a €50 million profit before tax for 2017, the group chief executive Fiona Muldoon has said that it is in the customers’ interests that the company has recovered so well in recent years and is now stable and able to “pay the claims of tomorrow”.
Speaking on RTE Radio One’s Morning Ireland this morning, Muldoon also responded to questions over increased premiums in recent years. She said: “It is the situation of all customers of all companies in insurance terms are paying more for their insurance than they were three years ago.
“It’s a full three years since any shareholder had a dividend in FBD and we are very happy today to be announcing profit and the payment of a 24c/share dividend.
It is also the case that it is in customers’ interests that we are strong and stable and making a profit.
The CEO explained: “We take the risks on behalf of the customers, whether that’s as a result of storms or accidents on farm places or court cases from people being sued – we take all of those risks; and with Storm Ophelia we paid out €10 to €11 million. Storm Darwin in 2014 – €44 million and we have another storm on the way.
“So, I think it is in everybody’s interest that an insurance company is making a profit and stable and around to pay the claims of tomorrow.”
Muldoon was also asked if the sharp increase in profits – up from €11 million recorded profit in 2016 – made it harder to stand over the increased premiums of recent years.
Responding, Muldoon pointed out that the reported profit for 2017 was not as straightforward as it seemed.
She said: “In insurance terms, that’s not quite the way it works; if we break down the profit we’ve made, €30 million of it comes from this year and €15 million of it comes from last year, where we were seeing improvements in 2016, but we wanted to be cautious about recognising those improvements.
“Almost €6 million of it is as a result of the court case, a reserve release in respect of the Setanta court case, which you may remember was the failure of a Maltese insurance company – where the Irish companies were going to be asked to pay for that and, in the end, the court found that the Irish companies should not pay for it.
“So, if you break down the profits that way, I don’t think it could be characterised in the way your question suggests.”
Finally, asked what FBD customers could expect for the coming year regarding premiums, Muldoon refused to speculate:
I’m on the record as saying that, for as long as claims costs are rising, premiums would not be coming down.
“The industry is being investigated for price signalling, so we have long since ceased talk about trying to project where prices are going.”