Profits at insurer FBD fell 16 per cent during the first half of the year despite a rise in premium revenue, its interim report shows.
The company made a profit of €28 million in the six months to the end of June compared with €33.3 million during the same period last year.
FBD said the profit was generated by continuing growth in insurance revenue, increasing investment returns and favourable prior year reserve development.
However, it said this was “offset somewhat” by weather and inflation in motor damage and property claims.
Insurance revenue was up 9.3 per cent higher at €212.6 million. Gross written premium was the largest part of insurance revenue and was 9.5 per cent higher than 2023 at €226.1 million with growth across all customer groups.
The farmer sector was said to be “performing well”, delivering more than half of premium growth. New business volumes saw double digit increases over the period.
Average premiums increased by 8.3 per cent across the portfolio with almost two-thirds of the increase reflecting the change in mix and increasing liability and property coverage, with some rates applied reflecting the inflationary impacts.
Motor damage notifications were 3 per cent up on the same period last year and settlement costs rose by 10 per cent over the last 12 months, following double-digit increases experienced in recent years. Private motor average premiums increased by 5.6 per cent “reflecting the increasing cost of motor damage claims”, the company said.
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FBD said repair costs are higher due to increasing costs of input and additional complexity relating to advanced technology in newer vehicles, coupled with a rising volume of claims.
The average home cover premium rose 11.5 per cent reflecting increases in sums insured as rebuild costs continue to rise. Farm average premiums increased 6.9 per cent largely as a result of increases in property sums insured for the same reason.
Property claim notifications were up 29 per cent year-on-year due to an increase in the number of storm claims in 2024.
The average cost of property claims was 8 per cent higher over the past 12 months compared with the previous year, excluding business interruption claims.
Net of reinsurance, weather losses to date in 2024 were substantially higher than the first half of 2023, the company said. This was primarily driven by Storm Isha in January. There were no storms of note in the first half of 2023.
Insurance service expenses increased by €37.2 million to €129.1 million. The gross incurred claims increased by €18.6 million reflecting increasing frequency and inflation in motor damage claims, costs and weather.
Injury notifications were 5 per cent ahead year on year, largely reflecting increased policy count as well as a marginally higer incidence of injury frequency. The average cost of injury claims settlements was up 2 per cent on the previous 12 months.
Claims being settled under the personal injuries guidelines continue to be more than 40 per cent lower in value compared with the previous Book of Quantum.
The board approved a special dividend of 100 cent per ordinary share. Ordinary shareholders’ funds amounted to €464.1 million at the end of the period, down from €477 million six months earlier.
FBD Group chief executive Tomás Ó Midheach said he was “pleased to announce a strong, consistent performance” from the company “as the business continued to grow over the period across all customer sectors”.
“Our customer focused strategy has established a strong momentum, as seen in the increase in number of new customers over the period and in the retention rates of our loyal customers,” he added.
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