Sunday 17 December 2017

FBD posts €96m pre-tax loss in first six months, job losses on cards

Fiona Muldoon, the interim CEO at FBD
Fiona Muldoon, the interim CEO at FBD
Gavin McLoughlin

Gavin McLoughlin

Troubled insurer FBD posted a pre-tax loss of €96m in the first six months of the year.

Interim chief executive Fiona Muldoon called it 'a difficult day' for the company, its shareholders and its staff.

"The previously signalled claims uncertainty in Ireland has continued and deteriorated further.  The existing business strategy has not delivered profitable growth and, given the significant losses reported today, the Group has reviewed its strategic direction," FBD said in a statement released to the stock exchange this morning.

"The Group has decided on a strategy that will focus on those things it does best, servicing the insurance needs of FBD’s agricultural and small business customers and a single brand consumer strategy for motorists and home owners.  FBD will reduce expenses in line with this simplified strategy."

The company said it is committed to returning to profitability and is exiting any areas where this cannot be achieved.

Speaking on RTE's Morning Ireland, Ms Muldoon would not rule out job losses but said the company would have to talk to staff first.

It said it will "continue to deliver the rating and pricing actions necessary to achieve profitability" - indicating that premiums may rise.

FBD confirmed it had agreed to sell its 50pc stake in a hotel and leisure joint venture, and said it would invest the proceeds as equity in FBD Insurance.

It said it "has taken a number of additional steps to strengthen its capital position, and will further improve its capital buffers" ahead of new solvency rules being introduced on January 1.

"These include agreed changes to the staff pension scheme, as well as exploring options for raising regulatory capital in the debt capital markets," the company said.

The company swung to a €4.5m pre-tax loss in 2014 after making a pre-tax profit of €51.4m in 2013. Andrew Langford recently resigned as chief executive and was replaced on an interim basis by Ms Muldoon.

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