FBD predicts insurance industry will continue to be loss making throughout 2016
Irish insurance firm FBD believes that the insurance industry will be loss making for the rest of the year and for 2016.
In an interim management statement issued this morning the company said that the Irish insurance market has grown throughout the year alongside the economic recovery.
However, it said: “Despite this, industry profitability continues to be challenging, and the group believes that the industry will continue to be loss making for 2015 and 2016.
“It remains FBD's view that the market has not increased rates sufficiently to compensate for the significant deterioration in the claims environment.”
The company said it is prioritising profitability over volume growth. It said policy volumes have declined 9.2pc year to date, but added that this was offset by average rate increases of 9.1pc.
FBD said that the claims settlement environment “remains challenging”, although it added that it had been in line with group expectations since the end of the second quarter.
“The slowdown in the rate of our claims settlements continued. The underwriting action taken by the group over the past eighteen months is having a positive effect, with improvements in claims frequency experienced despite the increased level of activity in the wider economy.
“This improvement in attritional claims has been offset somewhat by increased large claims experience since the last market update.”
FBD said it has made good progress on achieving targeted cost savings.
The company is working to restructure its business after slumping to a €4.5m loss last year.