FBD has bucked the trend by growing its profits and market share at a time when the broader insurance market is contracting. However, less benign weather conditions might impact on the group in 2013.

In 2012, the insurance group reported a 5.3 per cent increase in pretax profits to € 52.9 million, as the group increased its market share to 12.5 per cent, its highest ever share, up from 12.2 per cent in 2011, and 7.5 per cent in 2000.

While gross written premiums fell by 5.5 per cent on average in the market, FBD reported a 2 per cent decline, to €344.3 million, as it focused on the development of opportunities within its risk appetite.

Home insurance

According to group chief executive Andrew Langford, FBD reported growth in all lines of business in 2012, with the exception of home insurance, where, he noted, competitors were offering uneconomic rates. FBD did not change its rates last year, and has “no intention to increase rates” in 2013, Mr Langford said.

Net claims incurred by the insurer improved by 5.1 per cent to €191.9 million, against a background of benign weather conditions and a significant decline in road deaths.

This resulted in an “excellent” combined operating ratio of 89.1 per cent, compared to 91.4 per cent in 2011.

Operating earnings per share (EPS) increased by 9.6 per cent to 172 cent, and the group further strengthened its capital base and balance sheet with net asset value per share increasing by 14.4 per cent to 721 cent.

The insurer had a solvency level of 73.5 per cent of net premium earned as of end-December 2012, up from 66 per cent the previous year.

As a result, the board of FBD decided to increase the full-year dividend by 22.5 per cent to 42.25 cent, a move which will help the insurer progress towards its desired pay-out ratio while maintaining a high dividend cover.

Operating profit

FBD’s financial services operations, which include life, pension and investment broking services, reported an operating profit of € 5.6 million in “challenging market conditions”, well ahead of the €4.2 million delivered in 2011.

Looking to 2013, FBD is guiding an operating EPS of 145-155 cent, as normal weather conditions return. It expects to further increase penetration of key urban markets, in particular Dublin, and of the business insurance market, in partnership with brokers.

“Even if the market is static we would see good potential,” Mr Langford said.