It's neither feast nor famine with cost-cutting plan still to bear fruit
OFTEN when companies ply journalists with food it's because they hope we'll be so busy scoffing the goods we won't notice the bad news buried deep in smoothly polished press releases.
So when FBD laid on pancakes, fruit and Lenten-banned treats of sweets and chocolate at their full-year results briefing yesterday morning, the red flags immediately went up.
Sure, the results looked good -- operating profits up by 41pc, bottom line results improved by €30m, market share on the up -- but there's gotta be a catch in there somewhere. FBD's bottom-line loss shrank from €30.9m in 2009 to just €3.2m in 2010. But the bulk of that achievement was linked to an €11m gain from FBD's pension scheme and a €10m improvement in FBD's property impairments.
It's a fair point, but it also misses the point. The really important thing for insurers is their operating results. And in FBD's case, the news looks good. Last year, the plc pushed through average premium increases of 3pc on personal motor and of 9.4pc in home insurance -- no mean feat in a brutal recession. Market share is climbing slowly but surely, rising from 11.5pc to 11.9pc last year.
True, FBD's 2010 combined operating ratio result of 99.8pc is only marginally better than 2009's 104pc, but it's a significant milestone.
More of the same is promised next year. FBD embarked on a cost-cutting plan in 2010, many of the results have yet to bear fruit. Earnings per share grew from 75c to 106c last year -- FBD is aiming for "130 to 140c" in 2011. Sometimes, it seems, a good spread is just a good spread. Either that or FBD was trying to fatten us up so we'd become obese, drive less and bring down motor claims.