Profits rise at FBD Holdings and Dalata Hotel Group
FBD Holdings had claims to a value of €11m related to Storm Ophelia but the net cost to the insurer was €5.4m after some of the risk was shared with reinsurers. The stock market listed insurance company said today that it made a pre-tax profit of just under €50m last year, up from €11.4m in 2016. Less than a year after ruling out dividend payments to shareholders for the forseeable future, FBD's board has approved a 24 per cent share payout.
FBD Holdings' chief executive Fiona Muldoon said it has been three years since the company's shareholders received a dividend and she hailed the move as a major milestone for the insurer. As well as for the company's shareholders' interests, Ms Muldoon said it is in the company's customers' interest to have a strong and stable company and making a profit. She said the company takes the risk for its customers whether this is as a result of storms, or accidents or court cases where people are being sued. The company paid out €10-11m in claims from Storm Ophelia last year, while it took a €44m hit from Storm Darwin in 2014. Another storm is on the way this week and Ms Muldoon said it is in everyone's interest that FBD is making a profit, remains stable and is around to pay the claims of tomorrow.
Breaking down today's profit figure, Ms Muldoon said that €30m of the figure relates to 2017 and €50m relates to 2016. She said the company had been seeing improvements in 2016 but wanted to be cautious about recognising those improvements. Another €5.6m relates to the Setanta insurance case after the Supreme Court ruling which found that the Motor Insurers' Bureau of Ireland was not liable for third party motor insurer insolvency.
As regards premiums, the FBD CEO said that as long as claims costs are rising, premiums will not reduce. She said that she and the company have long ceased talking about trying to project where prices are going.
Record high visitor numbers to Ireland proved a boon for the Dalata Hotels Group last year. Full year results published this morning show average revenue per room rose by 10% across the group, which operates hotels both here and in the UK, to €88.50. Occupancy rates were up one percentage point to 83.1%. Overall revenue was up almost 20% to €348.5m on which Dalata made a pre-tax profit of €77m - up 75% year-on-year. The company said that trading is marginally ahead of expectations for the first quarter of this year.
Dalata's chief executive Pat McCann said the company has a very ambititious plan for expansion. He noted that the value of Dalata's property, plant and equipment is now almost €1 billion compared to €23.9m when it first listed on the Irish Stock Exchange in 2014. The company has managed to build a very sound base and a strong balance sheet which he said gives it a lot of scope to grow the business.
On insurance costs, Mr McCann said the issue is always a big challenge for the hotel industry, while the claims culture in the Irish economy does not help the situation. He said he expects that premiums will continue to rise. According to Mr McCann, Dalata self-insures itself up to a certain level, which means that the company is in control of most of the elements of its insurance.
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