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Independent.ie

Tuesday 19 March 2019

FBD hit by strong competition from new entrants in farmer insurance market

FBD chief Fiona Muldoon
FBD chief Fiona Muldoon
Margaret Donnelly

Margaret Donnelly

Strong competition in the agri insurance sector impacted FBD's agri business, according to its latest results.

Last year saw AXA enter the farm insurance market, taking on FBD in a head-to-head battle for farmers pockets. AXA launched its farm insurance business last summer, headed up by former FBD head of Farm and Business insurance Christy Doherty.

Today, FBD CEO Fiona Muldoon said strong competition in all customer segments resulted in a decrease in gross written premium of €1m to €371.5m (2017: €372.5m).

She said increases in Commercial business were offset by reductions in Agri and Consumer as we maintained our underwriting discipline in the face of strong competition.

Muldoon also said FBD experienced an increase in farm related employers liability, while tractor claims continues to emphasise the urgent need for better farm safety.

Storm Emma was the company's only extreme weather event of 2018, she said, with a net cost after reinsurance recoveries of €6.6m.

Shares in insurer FBD were up over 3pc in early morning trading today after the group recorded profit before tax of €50m last year, in line with the €49.7m reported in 2017.

Gross written premium of €371.5m for the year was down marginally on 2017, due to what the group said was "a highly competitive environment," according to annual results from FBD.

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However, FBD’s combined operating ratio (a measure of profitability) of 81.2pc improved from 86.2pc in 2017, and includes a €28.7m (8.5pc) benefit from prior year reserve release and Storm Emma net costs after reinsurance recoveries of €6.6m.

In addition, the group proposed a dividend of 50c per share in respect of 2018, double what it paid in 2017.

Fiona Muldoon, CEO of FBD, said: "Our continued focus on underwriting discipline has delivered excellent underwriting profits for 2018. I am delighted the board has proposed to more than double the dividend to 50c per share on the back of such strong results, rewarding our loyal shareholders."

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