Insurer FBD Holdings saw pre-tax profits fall 29 per cent last year on the back of a substantial fall in investment returns. Operating profits at the Irish-owned company rose 8.3 per cent to €30.2 million on a 20.7 per cent increase in premium income to almost €248 million.

FBD's underwriting losses continued to rise, although they fell marginally as a proportion of premiums.

The loss on motor insurance fell fractionally to €22.28 million from €22.8 million but was more than offset by growing losses on liability insurance, which rose to €10.5 million from €6 million a year earlier.

Chief executive Mr Paul O'Callaghan said the motor account had done very well but that it had been undermined by the cost of uninsured drivers. This rose substantially last year and now amounts to €112 per car policyholder.

Despite the underwriting loss, insurance and reinsurance business contributed €17.64 million to group operating profit, up 46 per cent on 2000. Profits in the financial services division were steady at €2.46 million while the property, hotels and leisure division saw a sharp growth in profit to €10.1 million once the extraordinary gain from the sale of its IFSC property the previous year is stripped out of the figures. The group has revalued its Spanish properties, adding €20.5 million to reserves.

Shareholders will receive a final dividend of 11.4 cent per share bringing the full year dividend to 19.5 cent, a rise of 13 per cent.

The results come less than a week after those of rival Hibernian, whose parent CGNU announced a dramatic cut in dividends.

Mr O'Callaghan believes FBD is in a good position to grow its business and capitalise on the problems of some of its larger multinational rivals. "Globalisation has forced increased premium rates now for Irish customers," he said. "The major international groups who bought into the Irish market expensively are now looking for a return.

"We believe there are good opportunities out there for FBD but we have to be careful. It is very easy to lose money these days on underwriting."

Group assets rose 16.8 per cent to €878 million while shareholder funds stand at €202 million, up 23 per cent.

He said trading in 2002 had been buoyant to date.

IFA president Mr John Dillon has been co-opted onto the board replacing Mr Tom Parlon, his predecessor as farm leader.