Irish insurer FBD has reported better than expected results for 2005 helped by a strong performance at its underwriting business. It also said this year had started well and, while premiums were coming under pressure, it was confident of winning sufficient new business to offset declines.
Pretax profits rose by 40 per cent to €185.2 million in the year to the end of December, from €132 million in 2004. Gross underwriting premiums were up 11 per cent, at €389.5 million, while total operating profit was up 30 per cent at €162.6 million.
"This performance was underpinned by our insurance business," said chief executive Philip Fitzsimons. "New business volumes were strong and more than offset reductions in premiums that were implemented during the year."
The underwriting business accounts for 85 per cent of operating profit, with property and financial services making up the remaining 15 per cent.
New insurance business increased by 12 per cent last year, a level of growth Mr Fitzsimons is targeting again this year. However, he said he expected to see further pressure on premiums. Taking these two factors into account, "gross written premiums will likely grow at a rate of single-digits", he said.
Operating profits from the group's non-underwriting divisions were up 53 per cent, at €27.7 million, though a slowdown has been experienced in both the Irish and Spanish property markets, according to Mr Fitzsimons.
Last month, FBD announced the sale of development land in Spain and said it would return €120 million of the proceeds to shareholders. FBD will pay a final dividend of 37.5 cent, bringing the total for the year to 57.5 cent, up 44 per cent on the prior year.
Analysts welcomed the results, describing them as strong and blaming the decline in the group's share price on the general weak market. Davy said it would upgrade its results for this year by more than 3 per cent. The shares fell 2.4 per cent to €40.5.
Mr Fitzsimons said the group was assessing all options for its unallocated capital, which stands at about €140 million. However, he said the money would not be invested in the property market.
