FBD calls for introduction of levy to tackle road crashes

Insurance group FBD warned that penalty points alone will not reduce road crashes and called on the Government to use revenue from insurance premium levies to improve Ireland's deteriorating road safety record.

The 2 per cent levy on insurance premiums, which added about €80 million to Government coffers last year, could be used to create a "change of mindset" among Irish motorists, FBD chairman Michael Berkery told shareholders in Dublin yesterday.

"What needs to be brought about is a change of mindset by all motorists, especially young drivers, underpinned by adequate enforcement of the new and the old traffic laws," Mr Berkery said.

About 399 people died on Irish roads last year, up from 374 in 2004. Well over 100 have been killed so far this year.

Mr Berkery said that while measures to reduce claims had delivered a turnaround in insurance companies' performance and reformed Ireland's "over-costly claims regime," the Government should endeavour to make road safety a "critical national priority".

FBD reiterated at its annual general meeting that a strong performance at its underwriting business helped push pretax profits up 40 per cent to €185.2 million last year.

Operating profit for the year was up 30 per cent, at € 162.6 million.

"Shareholders and policyholders alike have benefited from the favourable turnaround in our underwriting experience, which has been a feature of FBD's and other Irish insurers' performance in recent times," the FBD chairman said yesterday.

The company's underwriting business accounts for 85 per cent of the insurer's operating profit, with property, leisure and financial services making up the remaining 15 per cent.

At the company's leisure property business, FBD was compelled earlier this year to dispose of development land at La Cala in Spain for €120 million after a slowdown in the country's property market.

The insurer plans to distribute the proceeds of the sale to shareholders by way of two special dividends.

FBD is also reviewing a number of options for its unallocated capital.

Included among these is the possibility of investing in its main insurance underwriting business or in related financial services activities, Mr Berkery said.