FBD has welcomed a recent Supreme Court decision upholding the legality of judicial guidelines aimed at reducing personal injury awards, saying it gives the “certainty” and reaffirms the insurer’s assumptions about the new regime.
In a first-quarter trading update issued in advance of its annual general meeting on Thursday, FBD also said its performance in the first three months of the year had been “solid”, although the business has been affected by storms, particularly Storm Isha in January.
“We continue to see growth in gross written premium (GWP) which has increased by approximately 9 per cent compared to the same period in 2023,” the insurer’s chief executive Tomás Ó Midheach said. “The growth in premium has come from increased new business policies written in business, retail and in particular farm.”
He said FBD remains confident in the underlying profitability of the business and its future prospects.
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The Supreme Court issued a landmark ruling last month dismissing a legal challenge against judge-approved guidelines slashing awards for mainly minor personal injuries. The majority decision means the guidelines, which became operational in April 2021, are legally binding but any changes to them will require legislation. The guidelines are currently under review by the Judicial Council and it is believed amendments may be proposed.
Against a backdrop of “continued inflation in property and motor damage claims” Mr Ó Midheach said FBD welcomed certainty brought by the recent Supreme Court ruling relating to personal injury guidelines, a reference to the Delaney versus Injuries Resolution Board case, which, he said “reaffirms our assumptions regarding the reducing cost of injury claims”.
Claims costs have been on the rise despite the new rules largely due to general inflation in the price of motor parts for repairs as well as construction costs over the past few years.
Meanwhile, Mr Ó Midheach said FBD had seen “positive” investment return, “reflecting higher income on reinvestment of the bond portfolios and positive performance in the equity markets”. However, he said this had been offset by the “negative” performance of the group’s bond portfolio amid market “volatility”.
“FBD remains a strongly capitalised business with a solvency capital ratio in excess of our stated risk appetite,” he said. “We will continue to engage with our stakeholders and to monitor our capital position with the intention of moving closer to target capital levels while preserving the sustainability of our annual ordinary dividend and maintaining a robust capital position for our growing business.”
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