Insurance firm FBD Holdings has said its gross written premiums to date in 2014 are 3 per cent ahead of the same time last year, due to growth in car and business insurance.

In an interim management statement this morning, the insurer said both policy volume and average premiums have increased compared to the same period last year, despite a competitive market environment.

FBD said the Irish insurance market has begun to benefit from the recent growth in economic activity, but continued to be a very competitive.

“Market rates have hardened for both car insurance and business insurance, while home insurance rates remain weak despite the severe weather experienced in the first quarter.”

It said increased economic activity leads to higher claims frequency, warning there is usually a time lag before this is fully reflected in market premiums.

“This will have a short term impact on profitability in 2014 and the early part of 2015.”

The insurer said persistent bad weather during January and February would also lead to an increase in the cost of 2014 claims, adding that the windstorm that hit Ireland on February 12th is likely to cost FBD €7.8 million, net of reinsurance.

For the remainder of 2014, FBD said it will seek to further increase penetration of key urban markets, in particular Dublin, and of the business insurance market.

The group reaffirmed its guidance of full-year operating earnings per share of between 120 and 130 cent, excluding any exceptional events that may arise.