FBD’s profits amounted to €11m before tax from continuing operations in 2016, but it warned that insurance premiums are set to ‘remain high’.
The company’s profits included a one-time pension gain of €7m last year, according to its preliminary results announcement.
FBD believes further strong progress was made on strategic initiatives during 2016, including a continued focus on the Irish farm and small business (SME) sector, underpinned by a single brand consumer strategy.
In 2016 FBD’s Gross Written Premium (GWP) fell by €1m, to €362m, compared to the previous year, which included a €15m reduction in business written through brokers.
The loss in broker business was largely offset by price increases in some products along with a strong retention of core customers, according to FBD.
Average premium rate increases of 9% were offset by a 5% decline in policy volume from direct operations, it added.
FBD returned to making a profit last year, having reported a loss of €85.9m in 2015.
Insurance premiums set to ‘remain high’
The company was helped to return to profit in 2016 by an unusually mild winter and its own strong underwriting actions, Group Chief Executive, Fiona Muldoon said.
“Our strong customer relationships and the level of service we provide have ensured good retention in our key customer groups despite some of the necessary price increases they have experienced.
While we saw some degree of stabilisation in the cost of claims, we believe insurance premiums in Ireland are and will remain high until structural claims reform is successfully executed.
“We welcome the findings of the Government Cost of Insurance Working Group and the focus that it brings to the rising cost of claims for Irish customers,” she said.
Muldoon believes it is important that the Government follows through in translating these recommendations into policies and legislation that will deliver a lower cost, sustainable claims environment for the benefit of all customers.
“We look forward to working with others to ensure that these proposals are implemented in ways that will help Irish farmers, small businesses and consumers manage their insurance costs.
“In the absence of implementation of particular sections of a lengthy report, we believe Irish insurance customers will continue to bear the cost of significantly higher premiums than those seen in other countries,” she said.
Despite the challenges in the market Muldoon believes FBD is well positioned to make further progress during 2017.