FBD to underwrite car insurance offered through An Post unit
Deal with Post Insurance part of FBD strategy to rebuild its car cover business
Fiona Muldoon, CEO of FBD Insurance. Photograph: Eric Luke
An Post’s insurance subsidiary has agreed a deal with FBD Holdings to have the publicly-quoted insurer underwrite car policies for the State-owned postal group.
The move is part of a plan by Post Insurance to more than double its share of the car insurance market in the coming years.
It would also see FBD rebuild its business carried out through the intermediary channel, having moved to scale this back in 2015 as part of a wide-ranging restructuring plan which also saw the then-struggling company receive a €70 million investment from Canadian firm Fairfax Financial to help shore up its capital levels.
Post Insurance currently has about 92,000 motor insurance policy holders, giving it a 4 per cent share of the market. It is understood that the company wants to get its share into double digits.
Adding FBD to the mix would allow Post Insurance to offer more choice to customers and to grow its brand.
“Post Insurance will complement our own 33-branch network and sales centres and will ensure that FBD’s high-quality car insurance is available to many more Irish customers,”said Fiona Muldoon, chief executive of FBD.
The deal will require the IT platforms of both businesses to be connected. For FBD, it will act as another distribution channel for its motor policies.
Industry sources said that FBD would have more pricing control underwriting business channelled through Post Insurance than through a typical panel of brokers, where activity is price-driven. Currently, FBD only does commercial business through intermediaries.
Irish insurers hiked insurance premiums by more than 70 per cent in a little over three years to September 2016, according to Central Statistics Office data, as the industry grappled with losses in the face of rising car accidents in a recovering economy and surge in the cost of claims. However, premiums have since fallen by about 16 per cent on the back of signs of stabilisation in the claims environment.
Post Insurance previously traded as One Direct, with the brand changing in late 2015.
It acts as a credit intermediary and has 160 staff and a call centre operation in Athlone. Its products are also available through 26 branches around the country, and the business is led by managing director Paul Grimes, who previously spent 35 years with Aviva.
Mr Grimes said the agreement is “hugely exciting” for the An Post unit.
Post Insurance also has 60,000 home insurance policy holders, and is a tied agent for New Ireland for life insurance products.
Latest accounts for One Direct (Ireland) Ltd, trading as Post Insurance, show that its turnover rose by 14 per cent to €19.4 million in 2016. It posted a pretax profit that year of €2.4 million compared with just under €1.8 million in 2015.