In the first half of the year, insurance firm FBD experienced a 16% dip in profits, despite an augmentation in premium earnings, as per its half-year report. A sum of €28 million was generated as profit by the firm from January to June, a decrease from the €33.3 million acquired in the comparable period the previous year. FBD attributed the squeezed profits to a surge in insurance revenue, growth in investment returns and favourable prior year reserve improvement. However, escalating frequency and inflation in motor damage claims, and ongoing issues with property claims, partially counterbalanced these developments.
The company reported an increase of 9.3% in insurance revenue, reaching €212.6 million. The majority of this figure came from the gross written premium, which, at €226.1 million, was 9.5% more than in 2023. All customer demographics contributed to this growth.
Over half of the premium growth was due to the ‘well-performing’ farming sector. Simultaneously, there was a significant surge in new business volume in comparison to 2023. In terms of average premiums, there was a rise of 8.3% across the portfolio, chiefly due to the alteration in mixture and growing property and liability coverage.
Meanwhile, the company saw a 3% rise in motor damage alerts compared to the previous year, with settlement costs swelling by 10% in the past year. The average premium for private motor vehicles surged by 5.6%, reflecting the rising expense of motor damage claims. FBD attributed this increase in part to the advanced technology in more modern vehicles, which increases repair costs and claim frequency.
Regarding home cover, the average premium experienced a notable increase of 11.5% due to the rising cost of property rebuilds. Property claim notifications also rose by 29% in 2024 compared to the previous year, largely due to heightened storm damage. Excluding business interruption claims, the average cost of property claims rose by 8% in comparison to the previous 12 month period.
In a period net of reinsurance in 2024, the losses due to weather conditions were significantly more than what was recorded in the first six months of 2023, shares the company. The main contributing factor was Storm Isha, which struck in January. Remarkably, there were no significant storms within the first half-year of 2023.
Insurance service expenses surged by €37.2 million, amounting to €129.1 million. The gross claims that were incurred also spiked by €18.6 million, which represents the rise in frequency and inflation in the costs of claims associated with motor damages and weather conditions.
Compared to the previous year, there was a 5 per cent increase in injury notifications, primarily due to higher policy count along with a slight increase in the rate of injury occurrence. The average expense to settle injury claims increased by 2 per cent from the previous year.
Interestingly, claims that are being resolved according to the personal injuries guidelines are greater than 40 per cent less in terms of value, compared to the earlier Book of Quantum.
A special dividend of 100 cent per ordinary share was authorised by the board. At the end of the period, the total funds for ordinary shareholders were €464.1 million, a notable decrease from €477 million just six months prior.
Tomás Ó Midheach, the chief executive of FBD Group, expressed his satisfaction with the strong and consistent performance of the company. He emphasised that they had observed growth across all customer segments over this period. “We have been able to build remarkable momentum with our customer-centered strategy, as evidenced by the increasing number of new clientele secured during this period, coupled with commendable retention rates amongst our faithful customers,” he further added.