FBD won't be hiking premiums despite fall in profits
Published 27/08/2014 | 02:30
INSURER FBD Holdings says it won't hike customers' home and property premiums despite being hit with a €44m bill for last winter's storms.
A surge in weather related claims was a significant contributor to an 82pc plunge in profits at FBD Insurance, the company said yesterday.
High winds that battered the west and south-west of the country in February cost the insurer €44m in claims.
About 9,000 customers suffered damage from the storms, including 7,000 farmers. The storm damage was mainly to buildings, with roofs lifted off farm buildings a major source of claims.
"We're not planning to put up premiums for houses or farms," FBD's chief executive Andrew Langford said. He said high wind was the most costly weather issue for FBD, worse than floods or ice, because of the nature of the damage done.
"This year was especially bad because parts of the country were persistently battered by a number of storms in quick succession," he said.
But the level of destruction seen in February was a rarity, the most extreme wind event since the winters of 1997 and 1998, Andrew Langford said.
As an insurer it was FBD's job to absorb those costs for customers, he said.
And he said there was "no evidence" that climate change was making extreme wind storms more common.
FBD was particularly hit because it has a higher number of farm customers, and its customer base was particularly strong in the south-west, where the storms were worst, he said.
The other contributor to FBD's sharp drop in profits was a rise in motoring claims. There are more people on the roads making longer journeys, as the economy recovers, leading to more crash claims. Mr Langford said that while that was costly for insurers in the short term, in the longer run an economic recovery would be a boost to the insurer.
The insurance market is set to stabilise this year, after 11 straight years of contraction, according to FDB. The market is expected to grow next year for the first time since 2002.
So far this year the value of gross written premiums at FBD, a measure of the amount of insurance business being underwritten, was up 5.1pc to €184.9m. The company reported a sharp drop in pre-tax profit for the first six months of the year, down over 82pc to €3.27m.
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