Weather helps FBD profit rise by 26%

 

Good premium income growth and an improved underwriting result produced a 26 per cent rise in operating profits to €20.2 million at general insurance group FBD Holdings for 1999.

Chief executive Mr Paul O'Callaghan is confident the group can remain independent and continue to increase profits in a consolidating market.

FBD was reviewing its e-commerce strategy, he said yesterday, adding that he was concerned the costs of developing e-business could be substantial for a business which wanted to keep its overhead ratio (costs to premium income) at less than 15 per cent.

FBD's underwriting losses - the excess of claims and expenses over net premium income - fell to €13.5 million from €18.2 million. This improved underwriting result compensated for a fall in investment income in a low interest rate environment.

Mr O'Callaghan said the stronger performance was driven by better weather in 1999 which meant fewer weather related claims and lead to a doubling in underwriting profits on fire and property business to €10.4 millions. Underwriting losses on motor business were unchanged at €15.3 million, but with an 11 per cent rise in motor premium income to €92.7 million, the flat loss reflected an improved performance.

But losses on liability business rose to €12.4 million from €10.8 million.

Premium income increased across all sectors, with a 14.5 per cent rise in gross premiums to €179.8 million, reflecting business growth, higher insured values and some premium increases.

FBD declared a final dividend of 8.5 cents per share bringing the total dividend for the year to 15 cents, a rise of 14.1 per cent.