FBD Holdings share price remains low despite reassurances from the company’s top brass over its future.
Yesterday (Monday), shares in FBD Holdings closed at €6.029 on the Irish Stock Exchange closed just .60c higher than their low point last month of €5.34.
That low point coincided with the business reporting a loss for the half year of over €90m. Following the announcement, the company moved to reassure investors by strengthing its claims reserve by €88m while also selling assets and cutting €7m in annual costs.
Fiona Muldoon interim CEO at FDB conceded recently that making the reserve provision was tough on FBD’s beleaguered shareholders which have seen the value of their holdings fall significantly in 2015.
However, she said the move means that the insurer now has €835m set aside for policy holders and stressed that its claims ‘pay strength’ is beyond question.
“FBD will be there for the policy holder when and if they have a claim,” she said.
IFA to support bond issue
Following a meeting with Fiona Muldoon, the Executive Council of the IFA gave its full backing to FBD and welcomed its renewed focus on strengthening its insurance service to farmers, small and medium businesses and consumers.
IFA President Eddie Downey said farmers, the wider agri-sector and rural communities value the FBD service and they will continue to support the business in providing competitive rates and bespoke insurance cover.
“With reserves of over €800m on the balance sheet, FBD is well capitalised. IFA intend to support the bond required by FBD to increase these capital reserves in order to meet Solvency II requirements.”
Downey said that farmers, shareholders and customers are rightly very disappointed that FBD has found itself in such difficulty as a result of market conditions, new solvency rules and the business strategy pursued in the past.
It is also clear that necessary changes must be made at all levels of FBD to fully restore confidence and get the business back to profitability as soon as possible. In this regard, Eddie Downey welcomed the appointment of Liam Herlihy to the Board of FBD Holdings this week.