Insurer FBD has reported pre-tax profits of €19.1m for the six months to the end of June, down from the €21.8m for the same time last year.

The company said the fall in profits was expected and was due to reduced returns in global investment markets and a number of above average claims early in the reporting period. “Yes, the results were as expected and in line with our previous guidance,” explained Cathal O’Caoimh, FBD group finance director, to AgriLand today.

“We reported market leading profitability while continuing to grow our customer numbers, revenue and market share. This means that more Irish farmers, businesses and consumers than ever are choosing to buy Irish and insure with FBD.

“The small decline in profit was due to lower returns from global investment markets, which is an issue common to all insurers – in fact our investment return was better than most international insurers.”

O’Caoimh continued: “Like most other Irish businesses, the principle challenge is the economy and when it will start growing again. Premium income in the insurance sector has fallen 35 per cent from its peak in 2002 and the current year’s fall is estimated at 3 per cent. The agri sector has performed significantly better than the economy as a whole and this has been a strength for FBD. We are glad to say that more Irish farmers are choosing FBD as their insurer than at any time in the past.”

Among the highlights of its half-yearly report were:

Strong performance with half year profit before taxation of €19.1m
As expected, profit in the period is lower than the first half of 2012 primarily due to reduced
Returns in global investment markets
Key strategic initiatives deliver further growth in gross written premium, customer numbers and market share.
Industry leading combined operating ratio of 94.7 per cent (2012: 92.5 per cent)
Interim dividend increased 29 per cent to 15.75 cent
FBD Insurance capital base further strengthened with solvency level of 70 per cent, up from 63 per cent at 30 June 2012
Increase in net asset value per share to €7.40
Full-year operating earnings per share guidance re-affirmed at 145 – 155 cent per share.

Andrew Langford, the firm’s chief executive, said the results are ”excellent” given the difficult economic conditions.

”Key strategic initiatives delivered an increase in premium and customer numbers in an insurance market that continued to contract, resulting in further growth in FBD’s market share,” he added.A full presentation of FBD’s half yearly report in available here.

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Profit fall for FBD

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