Muldoon 'makes no apology' for FBD's 114pc jump in profits
FBD chief executive Fiona Muldoon has said she will not apologise for the group's strong performance after earnings jumped over 114pc.
The Dublin-listed insurance company reported profit before tax of €38.6m in the six months to June 30, up from €18m in the prior year, according to interim results.
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"We are a business, we don't make any apologies for making a profit, and sometimes when you are a consumer business, you have a situation where you are made to feel like you shouldn't be making a profit," Ms Muldoon (pictured) told the Irish Independent.
"Like every company, we are in business to make a profit for our shareholders and we are not apologising for that."
She added that FBD offers "very good-value insurance".
The market reacted positively to the results, with shares up by over 3pc at one point in trading yesterday. The performance was driven by factors including a strong investment result, benign weather compared with last year, underwriting discipline, and an €8m prior year reserve release.
Ms Muldoon said it was "to the benefit of consumers" that the company was strong and healthy. She added: "If you look at FBD over the last five years, we made a margin of 1.6pc over five years.
"No business would call that a huge margin; it is only four years ago that we announced a loss of €100m."
With increasing focus on the personal injury awards being handed down through the courts, Ms Muldoon said the price of insurance was a function of the costs that are in it.
She said: "The highest cost is ... personal injury awards; until they come down, I don't really see how you can have cheap insurance. You either have high court awards, or cheap insurance; you can't have both." She added that around one in five personal injury cases that FBD comes across has "gross exaggeration or fraud".
"Do I think that the insurance industry can do more? Yes," Ms Muldoon said.
"Do I wish we were allowed to share our data with each other a bit more? But we are not allowed to do that because of GDPR. But what we can do more of is follow through on investigations; report as much as possible to the guards.
"But every single one of those one in five won't be reported to the guards."
Despite growth in new business, overall premium levels were down modestly to €190m, from €192m in the prior year, which it said was due to a difficult competitive environment, including "aggressive competition and sustained price pressure". Combined operating ratio (a measure of profitability) is 82.5pc, compared with 88.6pc in 2018.
Eamonn Hughes, analyst at Goodbody Stockbrokers, said it was more one-off items that contributed to FBD's results. He said that on an underlying basis, claims costs were still going up.
FBD expects its full-year 2019 return on equity will be in the mid-to-high teens.