FBD chairman gives Langford a strong vote of confidence
Insurance company swung to loss in 2014
FBD Holdings chairman Michael Berkery has strongly backed Andrew Langford to continue as chief executive of the embattled insurance company.
Berkery said Langford has the "unequivocal support of the board" after the insurer swung to a pre-tax loss of €4.5m in 2014, compared to a pre-tax profit of €51.4m in 2013.
"I want to acknowledge Andrew's contribution during the year, sometimes it's maybe easier to be managing director in good times, and when things are difficult it's often more challenging. But then it's the challenge that makes the man or the person, and I think he'll rise to the challenge."
FBD's share price dropped 4pc last week as it released an interim management statement that said "the continuing significant uncertainty in the claims environment" would impact profitability in 2015. The shares are down more than 40pc in the last 12 months.
Langford told the Sunday Independent that actions FBD has taken has put the business back on course for profitability. It's scaling back the number of new motor customers it will take on this year.
"Things take a long time in insurance, but we're definitely doing the right things to get it back. The exact timing of it is not certain yet."
"I think with the benefit of hindsight, we were growing last year - not very aggressively, our growth has always been quite measured - but we grew at a time when, if we had our time again, we might have stayed static or decided to hold back a little bit.
"We've massive capacity for growth in FBD because we've developed a lot of different routes to market, but it's always about the pace that you grow and the timing that you grow.
"For the previous 12 months we only grew 2pc-3pc in terms of volume, and we probably would have held that back.
"The pace of the increase in the economy really did surprise us, we had anticipated an increase but nothing like the lift off that took place."
Economic growth usually leads to more claims because of the increase in activity.
Langford, who has been FBD chief executive since 2008, said that last year the company put up prices by an average of 4.5pc, but that they may have increased that if they had foreseen the scale of the deterioration in the claims environment.
He said he thinks he has the right skills to lead FBD forward, but that his position is a question for the board. He said he "absolutely" hadn't considered resigning.
"The company's facing difficult times and managing difficult times is a challenge but it's quite rewarding as well."
FBD's annual report shows Langford took a 20pc pay cut last year in earning €538,000. FBD executives and the company's remuneration committee decided no bonuses would be paid because of the company's 2014 performance. At the FBD AGM on Thursday, around 13pc of the votes went against the motion on Langford's re-election as a director.
Shareholders who spoke at the meeting were supportive of FBD management.
Sunday Indo Business