Profit jumps at FBD Insurance on the back of 'disciplined underwriting'
FBD Insurance has reported profit before tax of €38.6m in the six months to June 30, a jump on the profit of €18m in the same period last year.
The performance was driven by disciplined underwriting, a rebound in investment markets, a good winter and prior year reserve releases, according to interim results from the group.
The company looks on course to exceed its pre-tax profit of just over €50m in 2018.
Despite growth in new business, overall premium levels were down modestly to €190m, from €192m the prior year, which it said was due to a difficult competitive environment including “aggressive competition and sustained price pressure”.
Last year saw AXA enter the farm insurance market, taking on FBD in a head-to-head battle for farmers pockets.
The group’s combined operating ratio (a measure of profitability) is 82.5pc compared to 88.6pc in 2018. This includes prior year reserve release of €8.8m.
Fiona Muldoon, chief executive of FBD, said she was pleased with the “strong” results.
Ms Muldoon added that the group’s litigation claims costs continue to increase.
“The average cost of court awards, particularly for soft tissue injuries, remains too high,” she said.
Adding, “despite some judicial progress in limiting court awards we have seen no meaningful progress on structural reform and Irish businesses continue to be held to impossible standards in personal injury cases.”
FBD expects its full year 2019 return on equity will be mid-to-high teens.