INSURANCE GROUP FBD said yesterday that it has traded “modestly ahead” of market expectations during the second half of 2010, due to an improved claims experience coupled with rate increases.

FBD’s share price jumped more than 5 per cent to €6.07 on the Irish stock market after the insurer released an upbeat interim management statement.

Since July, it has delivered strong operating profits, and in the year to date its gross written premiums are “marginally up” on the same period last year, it said. Policy volumes in the second half of 2010 are level with last year, while premium rates have continued to rise.

A spokesman for the company said some low single-digit premium rate increases may be necessary in 2011, particularly for property insurance, “given recent claims experience”.

A survey released by Deloitte this week found that 89 per cent of motor insurance companies expect to hike premiums next year by 5 to 10 per cent. However, it is understood that FBD’s motor rate increases will be below this level.

FBD’s hotel and leisure businesses also delivered operating profits in the second half of 2010, despite very challenging conditions. However, oversupply in the market remains the key challenge facing these businesses, it said.

Following an independent valuation in June 2010, the group wrote off 45 per cent of the value of its Irish hotels and 42 per cent of its La Cala resort in Spain.

Another valuation process will be carried out on December 31st but FBD said that, because of the impairment charge already recognised, the potential for further writedowns has been “greatly reduced”.

FBD raised its guidance for full-year operating earnings per share by 10 per cent to 105-110 cent, well ahead of last year. NCB stockbrokers issued a “buy” rating for FBD on the basis of its update.

“Notwithstanding the risk of further modest asset writedowns, we remain positive on FBD and believe the group is well positioned to benefit from premiums hardening in the market,” NCB analyst Ciarán Callaghan said.