FBD profit boosted by Setanta case relief

Insurer posts €11.9 million pre-tax profit for the first half, compared to a €5.3 million loss

 Fiona Muldoon, chief executive of FBD Insurance. The insurer delivered a €11.9 million pre-tax profit for the first half of the year, compared to a €5.3 million loss for the same period last year. Photograph: Eric Luke

Fiona Muldoon, chief executive of FBD Insurance. The insurer delivered a €11.9 million pre-tax profit for the first half of the year, compared to a €5.3 million loss for the same period last year. Photograph: Eric Luke

 

FBD Holdings, Ireland’s only publicly-quoted insurer, swung into profit in the first half of the year, helped by the release of a €5.6 million provision previously set aside to cover its portion of an expected industry levy following the 2014 collapse of Setanta Insurance.

The Supreme Court moved in May to reject a lower court ruling last year that the Motor Insurers’ Bureau of Ireland (MIBI) carry the cost of Malta-based Setanta, which only wrote business in Ireland. The Republic’s highest court has decided that the State’s Insurance Compensation Fund pick up the bill, though caped at 65 per cent of the €90 million of Setanta’s outstanding claims.

FBD delivered a €11.9 million pre-tax profit for the first half of the year to June 30th, compared to a €5.3 million loss for the same period last year.

The insurer’s combined ratio, a keenly-followed gauge of net insurance claims and expenses divided by earned premium, fell to 93.1 per cent for the period, generating an underwriting profit of €11.1 million, though flattered by the Setanta-related provisions release. The ratio was 101 per cent in the same period last year. A figure below 100 per cent indicates an insurer is making a profit in business it writes.

“The results of the first half of 2017 are good and it is now evident that FBD has stabilised,” the company said in a statement, adding that it is “targeting modest profitable growth and continued stabilisation in policy volumes in the second half of 2017.”

Gross written insurance premium rose by 4.9 per cent in the reporting period to €189.7 million.