Farm Ireland

Monday 23 October 2017

Insurance rates set to rise as FBD posts €85m loss

Company targeting 'single digit' hikes on farm account premiums

FBD ceo Fiona Muldoon and chairman Michael Berkery, who announced he is to step down, picturd at the company’s recent egm. Photo: Damian Eagers
FBD ceo Fiona Muldoon and chairman Michael Berkery, who announced he is to step down, picturd at the company’s recent egm. Photo: Damian Eagers

Louise Hogan and John Mulligan

Insurance rates look set to rise at FBD following an €85m pre-tax loss after an "exceptionally difficult" year and well-known figures in farming circles are exiting the insurer's board.

Chief executive Fiona Muldoon said the company is targeting increases in farm accounts in the "low single digits" this year.

FBD is likely to generate a loss of about €1.5m next year before returning to profitability in 2017.

"We have an enormous amount to do during 2016 to make sure we get there," Ms Muldoon told the Farming Independent. "I think we've gone about doing all the things that we said we would do. I am confident that we have set ourselves the right challenges. It's not a slam dunk to get there. We're going to have to be vigilant and keep ploughing our own furrow."

Meanwhile, FBD Holdings plc chairman, Michael Berkery - who served as the IFA's general secretary for 25 years before retiring in 2009 - has confirmed he plans to retire next year from the FBD board after 19 years.

Former IFA president Eddie Downey has also confirmed he will not be seeking re-election to the FBD board next month.

Mr Downey, who received €30,000 in director's fees for 2014 from FBD, stepped down from the IFA presidency last November. His resignation followed the exit of then general secretary Pat Smith after it emerged Mr Smith received a total of nearly €1m in remuneration from the IFA over two years.

In a statement to the markets, FBD said four board members would not be going forward for re-election for a variety of reasons.

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The issue of board fees was highlighted in the report on corporate governance at the IFA produced by the association's former chief economist Con Lucey following the pay controversy. Mr Lucey recommended that all payments to the president from outside bodies should be paid into IFA funds.

All three candidates for the IFA presidency race have stated their position on the issue of IFA presidents serving on the board of FBD.

Henry Burns said the next IFA president would have an extremely busy schedule and the director position with FBD would have to be examined.

Joe Healy, who said he received €3,597 as a director on the separate Farmer Business Developments co-op - which owns 25pc of FBD - stated he felt the president of IFA should not be the representative on the FBD plc board. "To be a director on the FBD board is an onerous task," he said. "I feel the president of the IFA will be much too busy with the IFA over the next few years working to restore it."

Flor McCarthy, who last week claimed the IFA has been hit by a drop of €1m a year following the collapse in profits in the insurance company, said board membership for IFA officers should go back into the organisation.

Meanwhile, Mr Berkery said he wanted to record his and the board's "deep appreciation" to all four board members, including Mr Downey.

Indo Farming