Pre-tax profits at FBD Holdings fell by €36 million in 2022, compared to the previous year. According to the latest financial documents for the company, profit before tax in 2022 was €74 million, compared to €110 million in 2021.
This is attributed to low injury claims, benign weather and a positive prior-year reserve development of €48.3 million, arising from lower large claims experience in recent years and better-than-expected settlements of smaller claims
The end-of-year results also show policy count growth of 2.8% with retention levels of existing business increasing 1.5%, reaching a six-year high.
The average FBD premium increased by 0.6% across the portfolio with private motor premiums down 7.2%. There is a proposed dividend of 100c/share.
The gross written premium total was €383 million, an increase of 3.4% excluding the impact of Covid-19 pandemic premium rebates.
The accounts state that it was a “challenging year for fixed income assets” which saw negative investment returns of -€90 million. There was also a negative investment return of -€10 million through the Income Statement, primarily due to a negative return on risk assets.
Commenting on the results Tomás Ó’Midheach, group chief executive, said: “It is great to be in a position to announce another strong set of results for FBD despite negative investment returns.
“We continue to maintain our underwriting discipline delivering a healthy underwriting profit supported by positive prior-year reserve development.
“It is encouraging to see growth in customer and policy numbers. More customers are staying loyal to us which is testament to the value we offer them and the continuing customer service our people deliver,” he added.
FBD Holdings and the farming sector
FBD said that it has increased its relationship with customers in the business and farm sector in 2022 and intends to build on this further in 2023 by continuing to differentiate itself through its product and service offering.
“There is still uncertainty in the external claims environment as we await the outcome of the challenge to the Personal Injury Guidelines, and we see how they operate in practice,” Ó’Midheach added.
“We are now seeing reductions in average settlement costs feeding through in pre-litigation channels.
“Underinsurance is being highlighted as a concern for customers as inflation is impacting rebuild and replacement costs, and we are working with our customers to make sure they are adequately covered in the unfortunate event of a claim.
“We expect a reasoned ruling from the judge in respect of the Business Interruption Test Case,” he added.
The company said that the ruling is expected to provide certainty in respect of outstanding issues and help in reaching a final agreement with publicans enabling FBD to pay the balance of claims this year.
“FBD remains a strongly capitalised business with a Capital Ratio significantly in excess of our stated risk appetite,” Ó’Midheach continued.
“It is our intention to now engage with stakeholders on taking steps to return further capital in the short- and medium-term.”
FBD is one of Ireland’s largest property and casualty insurers which was established in the 1960s by farmers, for farmers. It has a network of 34 branches nationwide.