FBD Insurance shares soar after 10pc rise in full-year profit estimate
SHARES in FBD soared as much as 6pc yesterday after the insurance company upped its full-year earnings guidance by 10pc, citing improved claims experience and "hardening" premiums.
The insurance firm now expects to generate full-year earnings of between 105 and 110 cent a share this year, up 40pc to 45pc on 2009's performance, barring any "exceptional claims" later in the year.
In its interim management statement, FBD said the higher guidance was "primarily" as a result of a better performance in its core insurance business.
"Year to date, FBD's gross written premium is marginally up on last year while sector indicators suggest a further minor reduction in industry premium income," FBD said, hinting that its market share is growing again after a period of contraction.
FBD is also enjoying "improved" frequency on non-weather related claims, the statement added, pointing to a focus on "claims management initiatives". FBD introduced a fraud division earlier in the year to prevent a surge in recession-induced fraud.
On the non-underwriting side, FBD said its hotels and leisure projects in Ireland and Spain were trading profitably in the second half of 2010 despite "very challenging conditions".
They added that while the Irish hotels market is oversupplied, the company's Sunset Beach resort in Spain "performed particularly strongly", while property sales in the La Cala gold development were "ahead of expectations".
Recent FBD results have borne the scars of write-downs on its property portfolio at home and abroad.
FBD yesterday said the potential for "further downside" remained but had been "greatly reduced" by the markdowns already taken.