FBD predicts upward trend

The weather helped insurance company FBD maintain a "strong" trading performance in the second half of 2007, as the higher than normal incidence of water damage claims in the first half dropped off.

In a trading statement issued yesterday, the insurer said policy growth had continued at anticipated levels. The amount of premium written is in line with that written in 2006, notwithstanding premium reductions during the period, it said.

FBD is "positioned to maintain growth momentum" next year, it said, while price reductions appear to have abated.

Premiums on personal lines have fallen 7-9 per cent year-on-year, according to FBD chief executive Philip Fitzsimons.

But the pace of declines is slowing down, and premiums on some products may now be increasing.

"All of the insurers are signalling that premiums on personal lines have flattened, and if there is to be any trend next year, it will be upward," he said.

The underwriting result in the second half of 2007 will be "on budget", but income from its non-underwriting activities will be lower than originally budgeted, due to the impact of weak financial markets on its capital fund.

A sum of around €25 million was left in the capital fund after FBD made a €177 million distribution to shareholders in June 2007, and this remaining fund has now declined in value in line with falling equity markets.

Mr Fitzsimons said he was "surprised to read" a media report that an unidentified European financial institution has been building a stake in FBD with a view to making a €1 billion takeover bid. "No one has approached me," he said.

FBD, which is the only general insurer quoted on the Iseq, saw its share price rise by 11 cent yesterday to €24.91.