The Irish insurance market shrank in the first quarter of the year, but premium levels at FBD were in line with 2011 and policy volume grew, the company said yesterday in a trading statement ahead of its annual general meeting.

“The market continues to be very competitive as evidenced by the level of advertising spend and the pricing of business insurance risks,” FBD said in a statement.

Average revenue per policy was lower, but costs were also reduced as a combination of milder weather in the first three months of the year, a reduction in road travel by consumers and cost management initiatives by FBD helped reduce claims over the period.

Road fatalities were down 21 per cent in the quarter compared with a year earlier, and FBD said there was an improvement in both the frequency and average cost of property-related claims.

“However, the frequency of large claims reverted towards the norm from a particularly low level in the first quarter of last year and was in line with expectation,” FBD said.