FDB shares fall on profit warning

Shares in insurance firm FBD Holdings have fallen sharply on the Dublin market this morning after it issued a statement saying that first half pretax profits will be impacted by weakness in financial and commercial property markets.

At 12.28pm FBD shares were down 8.6 per cent at €18.90 giving the company a market capitalisation of €627.94.

In the statement the company said it had reduced its investment in equities in the second quarter because of the "uncertain outlook for financial markets" and that this would have a knock-on affect for longer-term investment returns.

FBD said premium income was in line with the same period in 2007 and that claims costs were running at "anticipated levels".

It also indicated that it sees premium costs increasing over the remainder of the year, adding that it is "ideally placed" to take advantage of an improving rate environment.

FBD also claimed that other insurers were continuing "to compete for new business at unrealistic rates".
Anna Lalor, analyst with Goodbody Stockbrokers said FBD's insurance business "is going quite well," said, "but the trading statement was quite general" on its property division.

FBD said it was continuing to seek "the most tax efficient method of distributing the €94.2 million" arising from its reserve release last year.

In April FBD chairman, Michael Berkery told its agm that turbulence in financial markets has had an "impact" on profits.

In that month Eureko withdrew its approach for the insurer after the FBD board described it as without merit.