FBD management upbeat after strong first quarter
FIRST-quarter profits at FBD's core insurance business topped both management expectations and 2011's results -- despite a further contraction in the insurance industry and a "very competitive" market.
The upbeat picture of FBD's underwriting profits was delivered to appreciative shareholders at the plc's annual general meeting in Farm Centre yesterday.
Chairman Michael Berkery told shareholders that the group was maintaining its full-year profit guidance of earnings per share in the 145-155c range "unless exceptional events arise".
Shares were trading at about €8.70 yesterday.
"We believe that the Irish insurance market contracted further during the first quarter of 2012, in line with economic activity," Mr Berkery said.
"The market continues to be very competitive."
He added that FBD had achieved an improved operating result for quarter one 2012 nonetheless after making "further progress in managing claims, and enjoying the benefits of benign weather" and a 21pc reduction in road fatalities.
FBD chief executive Andrew Langford acknowledged that there was a "likelihood" that the insurance industry would continue to contract as the economy did, but stressed that there was "opportunity" for FBD if the insurer was prepared to change.
FBD now has a record market share of 12.2pc.
Mr Langford said that market share would be "less than 10pc" if the insurer hadn't embraced initiatives like a more low-cost online seller NoNonsense.ie.
Shares in FBD rose by 1pc yesterday and are up about 40pc on the year to date.
"We talked about it this morning but thought it might be a bit indecent to raise it [the share price appreciation] from this side of the table," Mr Berkery said.
Contributions from the insurer's shareholders struck a congratulatory tone, as they thanked FBD's management in particular for their progressive dividend policy. One shareholder's request for insurance discounts for FBD shareholders was knocked back by Mr Berkery, who pointed out that while founding shareholders did get discounts, extending it to other shareholders was "not under consideration".
Another suggested the insurer should "tell the gardai to wake up" and take more action against uninsured drivers who were effectively being funded by insurance companies.