The chief executive of FBD Insurance said “progress is being made” in settling claims related to Storm Éowyn but reiterated that the group expects to take a €30 million hit from settlements related to the cyclone, which damaged homes and businesses across the country.
In a trading update in advance of the group’s annual general meeting on Thursday, chief executive Tomás Ó Midheach said FBD’s profitability, excluding the impact of “weather events” in January, has been “solid” so far this year and “in line with expectations”.
However, the Republic’s only indigenous insurer remains in line for a roughly €30 million hit from claims related to severe cold weather in January as well as Storm Éowyn, he said.
FBD outlined the expected €30 million hit to profits in a trading update at the end of February. At the time, it said its reinsurance programme provides cover for extreme events and “this will mitigate the financial impact to FBD”.
“We fully understand the significant impact these events have had on many of our customers,” Mr Ó Midheach said on Thursday. “Progress is being made in settling these claims quickly and fairly.”
In FBD’s full-year results in early March, Mr Ó Midheach said FBD was “disproportionately affected” by wind storms because of the size of its agri business, with farms more exposed to wind. However, he said Storm Éowyn, which FBD described as the biggest storm in its history, was not necessarily a “harbinger” of greater, more frequent storms to come in the future.
FBD continues to expect its pretax profit to come to €75 million this year, which, it said in February, is ahead of market expectations. Davy analyst Diarmaid Sheridan previously said he had been expecting a figure of €55 million for 2024.
Meanwhile, Mr Ó Midheach said income from FBD’s bond portfolios has continued to increase as maturing investments are reinvested at higher yields. Bond yields have risen this year against a backdrop of global economic uncertainty.
While market volatility has also led to declines in “liquid risk asset values”, namely equities, so far this year, he said the returns from the group’s bond portfolio have “offset” the fall in the value of other FBD investments.
“Overall, we remain confident in the underlying profitability, future growth prospects and capital strength of the business as well as our continued ability to deliver real value for both customer and shareholders,” Mr Ó Midheach said.
