Insurer FBD said on Wednesday that its average private motor premiums have dropped by 5 per cent so far this year in what it described as a “competitive market”.
The company said in a trading update that new Judicial Council guidelines, which reduced award levels for most categories of personal injury from late April, are "particularly welcome", and that it has been "proactive in reflecting their impact in the prices charged to customers".
Minister of State with responsibility for insurance, Sean Fleming, said last month that insurers had indicated that they will begin to reduce premiums as a result of the guidelines. Consumer advocates have expressed scepticism about how meaningful the response will be.
Still, Central Statistics Office (CSO) figures say motor coverage costs have fallen by more than 30 per cent from their mid-2016 peak to the end of 2020, having soared more than 70 per cent in the three years leading up to the high point.
“The underwriting performance of our business for 2021 to date has been in line with expectations,” FBD’s chief executive Tomás O’Midheach said in the trading update, on the day of the company’s annual general meeting. “While average premium charged has reduced, motor and liability claims experience has been benign and no significant weather events have occurred.”
Gross Written Premium (GWP) at FBD is currently about 1 per cent lower than the equivalent period in 2020 excluding the impact of Covid 19 rebates, it said. Policy numbers have remained stable in the year to date. Average premium has reduced by 3 per cent overall so far in 2021.
Dublin-listed set aside €65 million of provisions last year for its exposure to pub claims under business interruption policies triggered by Covid-19 restrictions. A landmark test case, involving four pub groups, found in February that FBD was liable. The insurer estimates that the total cost of making good on claims from over 1,000 pubs will come to €150 million, with most of it passed on to its reinsurers.
“A recent supplementary court judgement gave additional clarity on costs and the definition of closure. The final determination of the remaining aspects of quantum should be determined following a further court hearing in July,” said Mr O’Midheach. “In the meantime we will continue to progress our claim with reinsurers. In addition we have engaged with the Financial Services & Pensions Ombudsman (FSPO) on complaints that they are in the process of adjudicating.”
The CEO, who joined FBD in January, having previously been a top executive with AIB, said that the insurer remains "confident in the underlying profitability, future growth prospects, capital strength of the business and in our ability to continue to provide excellent service to our customers".