Insurance firm FBD says growth in economic activity to boost bottom line
INSURANCE firm FBD said today the growth in economic activity will "have a very positive effect on FBD in the medium term, particularly given the group's track record of outperforming the market."
The upbeat statement comes despite the fact that the bad weather at the beginning of the year will lead to hike in costs of 2014 claims and the windstorm that hit on February 12 will cost €7.8m, net of reinsurance - as previously outlined by the company.
"As previously indicated in the group's preliminary announcement issued on March 3 2014, increased economic activity leads to higher claims frequency and there is invariably a time lag before this is fully reflected in market premiums, particularly if activity grows faster than anticipated by the insurance market.
"This will have a short term impact on profitability in 2014 and the early part of 2015," it said in a statement.
While the Irish insurance market has begun to benefit from the recent growth in economic activity, it continued to be a very competitive market in the first quarter of 2014.
And it also added that both policy volume and average premiums have increased compared to the same period last year.
"The increase in policy volume is primarily from growth in car insurance and in business insurance," the insurance firm said.
FBD's AGM takes place today.