Insurer FBD Holdings has said it now expects to make an operating loss for the year as a result of a challenging claims environment.
In its Interim Management Statement, FBD said although the frequency of attritional bodily injury claims relating to car insurance was in line with expectation, in other respects the claims environment in recent months has been far more challenging than expected.
As a result, the Group is guiding a full year 2014 operating loss per share of zero to ten cent. Its shares slumped over 13pc in opening trade in Dublin this morning.
“Given the unprecedented volatility in claims costs in recent months, the Group is reducing the forecast result for the final quarter of the year by €10m," the statement said.
"As a result, the Group is guiding full-year 2014 operating loss per share of zero to ten cent, excluding any exceptional events that may arise.”
In the second half to date, the company has seen a "significantly higher" number of medium-sized injury claims (cost between €200,000 and €1million net of reinsurance) from accidents that occurred in 2011 and 2012.
"To reflect this exceptional development pattern, FBD has updated its reserving and rating models and taken a charge to current year earnings to ensure that a consistent level of prudence is maintained in claims reserves."
The combined cost of the adverse development and maintenance of the reserve level results in a charge of €13m.