FBD expects to have clarity this year from the High Court on whether it was right to refuse to pay out on publicans' business interruption cover.
The insurer raised to €30m yesterday its best estimate of potential costs of the cases. That is up from a previous precautionary reserve of €22m it had estimated and set aside in June.
In October, the High Court will hear four test actions taken by publicans who say the insurer failed to honour policies that included protection against business interruption as a result of an infectious outbreak when they were forced to close as a result of Covid-19.
With 14 days set for the trial and allowing for the possibility a judge will reserve judgement and consider the issues for potentially a number of weeks, the insurer would still anticipate the issues to be fully resolved this year, FBD's interim CEO Paul D'Alton said yesterday. That means the issue will be determined before incoming CEO Tomás O'Midheach takes over the reins in February.
Mr O'Midheach will serve out six months notice as deputy chief executive of AIB in the meantime. FBD confirmed the appointment of the new chief executive yesterday.
At AIB, Mr O'Midheach's base salary of € 485,000 was subject to the half a million banker pay cap - although with pension and allowances his total pay package was €597,000.
Fiona Muldoon's pay package at FBD last year added up to €993,000. Well above what can be paid in State-backed banks.
The four actions are representative of hundreds more and the insurer will seek to apply whatever decision the court makes across all similar claims.
Yesterday, FBD reported a loss before tax of €9.3m for the six months to the end of June compared to profit before tax of €39m in the first half of 2019.
A proposed dividend of €35m for 2019 that was set to be paid this year is on hold, in line with pressure from European authorities against EU insurers paying out to shareholders amid the Covid crisis. FBD said it intends to pay a dividend eventually, but the timing and amount of distribution of capital is uncertain.
The business benefited from a decline in claims during the period of the lockdown, when road traffic was low and from an increase of 6,500 policy holders since the beginning of 2020.
Executives said retail and commercial insurance customers had continued to pay premiums as normal during the lockdown - with no evidence of a rise in bad debts in the period.