FBD Insurance hikes premiums for motorists but farmers escape rise
But car insurance quotes will rise as share price takes a battering
Published 26/08/2015 | 02:30
Farmers are likely to escape any surge in insurance rates on farmyard premiums but car insurance costs are expected to surge as FBD fights to restore profitability.
Shares in FBD, in which thousands of farmers across the country have an interest, plunged sharply yesterday, with shares down by 50pc so far this year.
FBD interim chief executive Fiona Muldoon confirmed that premium rises are on the way, but stressed that the struggling company is mindful of its agri customers - the company's core customer base.
"We're very mindful of our farm customers," she told Farming Independent. "They have already seen premium increases of an average of 4pc to 5pc."
Ms Muldoon said that more public and employer liability claims have been made by farmers. "I think all people will pay more, including the farmers," she said.
But an FBD spokesman confirmed that farmers should only expect to be paying more for their general car insurance in coming months, rather than shouldering any hikes in other farm-related premiums offered by the company.
Ms Muldoon also stressed that rate increases for farmers are likely to be "more modest" than those that its other customers can expect.
"We have always insured farmers' cars. We will continue to insure farmers' cars, their tractors, commercial vehicles and whatever else they drive," she said.
FBD expects to raise general motor insurance premiums by about 10pc over the next 10 months, according to Ms Muldoon.
It's also planning to shore up its financial position.
FBD is selling its leisure interests, including three hotels in Ireland and two in Spain, to its shareholder Farmers Business Development for €48.5m and approval will be sought from shareholders sometime around the end of September.
Farmers Business Development owns almost 29pc of FBD.
The IFA president and FBD board member Eddie Downey said farmers, shareholders and customers were disappointed that FBD has found itself in such difficulty.
However, he added that farmers can have confidence in FBD's ability to meet claims.
Shares fell sharply on the stock market earlier this week as the company said that it had made a pre-tax loss of €96.4m in the first half of 2015 due to spiralling claims and unsustainable premium pricing.
The company is expected to cut about 100 jobs from its 1,050 workforce as part of its efforts to restore profitability by the end of 2016.
It's also likely to raise money on the international debt markets this autumn as an extra solvency buffer in advance of new European Union rules coming into effect on January 1.