FBD Holdings plc has announced a dramatic reduction in profits for 2020 in its preliminary announcement for last year, with Covid-19 having a severe impact on the company.
Profit before tax of €4.8 million was reported. Though well down on the €112.5 million recorded in 2019, the company said last year’s profit “reflects a strong underlying business performance and includes positive prior year claims reserve development of €23 million and an investment return of €10 million”.
The Commercial Court judgement delivered on February 5 “provides clarity” around the liability for Covid-19 pandemic business interruption claims relating to pub policies, FBD said.
Gross claims costs (including legal and other expenses) are currently estimated to be approximately €150 million. The effects of the judgement are being considered with reinsurance partners in order to finalise the reinsurance recovery position, FBD says.
Reported Combined Operating Ratio (COR) of 101.4% “reflects the adverse business interruption impact” of 20.3% – some €65 million – and positive prior year claims development of 7.4% (€23 million), it was added. Excluding these the current year COR is 88.5%.
Basic earnings per share dropped from 281c in 2019 to 13c last year, while net assets per share increased from 1,068 to 1,095 over the same time period.
Gross Written Premium (GWP) of €358 million was reported; this is down 3% on 2019.
However, the firm reported an increase of over 14,400 policy holders since the start of 2020 as its partnership channels grow.
“Our capital position remains strong with a Solvency Capital Ratio of 197% [unaudited] with the unpaid 2019 dividend no longer accrued,” an FBD spokesperson said.
“Given the continuing uncertainty prevailing, the board continues to believe that capital preservation is paramount and therefore no dividend is being proposed at this time.
“The board will however keep the matter of capital return to shareholders under continuous review.”
In other developments over the past year, forbearance measures during 2020 included rebates for motor and commercial customers of €12 million, removing administration and cancellation fees on motor and home to support continued cover and Farm Relief Services in conjunction with the Irish Farmers’ Association.
A new van product was launched in April 2020, with a new business farm offer also launched during the year.
Brand awareness increased to “top three” levels, the company concluded.