FBD reports loss before tax of €9 million for first 6 months of 2020
FBD Holdings plc has reported a loss before tax of €9 million for the first six months of 2020, up to June 30, in its latest half-yearly report.
Published today, Friday, July 31, the firm pointed to the impact of Covid-19 and subsequent uncertainty for the downturn in fortunes.
The company recorded a Gross Written Premium (GWP) of €176 million. This is down 7% on 2019 (down 1% excluding €11 million of the Covid-19 pandemic related premium rebates included in the half-year report).
FBD added that there is “ongoing uncertainty surrounding the Covid-19 pandemic-related business interruption claims, which are subject to legal proceedings, with best estimate costs of €30 million included, taking into account the most up-to-date information in assessing the expected costs and probability of occurrence of potential outcomes”.
A combined operating ratio of 103% was recorded; this was impacted by the business interruption claims costs and benefited from the positive prior year claims development of €8 million.
FBD stressed, however, that its capital position remains strong with a solvency capital ratio of 186% (unaudited), adding: “We continue to deduct the 2019 proposed dividend of €35 million; however, the timing and amount of distribution of capital is uncertain.”
Average premiums were down 3.4% across the portfolio, with private motor down 7.6%, farm premiums down 3%, home down 2.3% and business up slightly by 1.5%.
The insurance business has recorded an increase of 6,500 policy holders since the beginning of 2020.
Commenting on these results Paul D’Alton, interim group chief executive, said:
“These are a robust set of results in very difficult circumstances for our customers and employees. Our profitability, excluding the business interruption costs and capital position, remain strong and we continue to invest in our business for the future.
“We have experienced a lot of publicity in recent months regarding business interruption claims by customers.
We acknowledge the disappointment and frustration of affected businesses that their business interruption insurance does not respond to cover pandemics. However, we are unable to provide cover for what we believe to be, and are advised is, an uninsured risk not covered by our policies.
“We have a duty to all of our customers to settle claims consistently with the coverage provided so that we can continue to offer products at affordable pricing levels and pay valid claims.
“Proceedings will be brought, by way of test case, which is now scheduled for hearing in the Commercial Court in October 2020.
“We believe that this is the quickest and most efficient way of achieving clarity for our customers.
Until clarity emerges in relation to business interruption insurance, we expect a period of uncertainty for FBD.
“However, we remain confident in the underlying profitability, future growth prospects, capital strength of the business and in our ability to continue to provide excellent service to our customers,” D’Alton concluded.