Insurance group FBD said its operating profits for the year to December 2011 jumped by 60% to €63.9m, helped by favourable weather conditions and a low level of large claims.
The company said that despite the continuing difficult economic conditions, its pre-tax profits rose to €59.7m from a pre-tax loss of €3.1m in 2010.
FBD said it was recommending a final dividend of 23.25 cent per share, up from the 21 cent paid out in 2010. This brings the full 2011 dividend to 34.5 cent, up 9.5% on the 31.4 cent the previous year.
During the year the company decided that it should focus on its core insurance writing operations. As a result, FBD entered into a joint venture, which now owns and manages its former property and leisure operations, and it also sold its general insurance broking business.
''These two transactions represent significant strategic steps for the group, allowing it to focus on insurance underwriting and to pursue further growth in the business insurance market through the wider broker channel,'' the company said.
In its results statement, FBD said that economic uncertainty has reduced but Irish domestic demand is still likely to decline further so it will be difficult to grow premium income.
FBD said that gross premium written of €35.1m is down 2% in 2010 in a market that has declined by 4.9%. It said it has continued its growth in the market share, which now stands at 12.2%.
Net claims last year fell by over 14% to €33.1m. The company said this was due to claims management initiatives, risk selection and other underwriting improvements. It said that factors outside of its control - including weather events, the frequency of large claims and the reduction in economic activity - also contributed positively to the fall in claims.
''All of these three factors are not expected to behave in such a positive manner in each financial year and therefore claim costs ae likely to revert towards the norm in 2012,'' the company cautioned.
“FBD delivered an excellent performance and made significant progress in advancing its strategic priorities in 2011, a challenging year for Ireland’s economy and the insurance sector,'' commented FBD's chief executive Andrew Langford.
''The growth in profits achieved in 2011 puts the group in a very strong position to progress its plans. For the first year since 2007, the results have benefited from
favourable weather conditions and a low level of large claims,'' he added.
''The group has a strong capital base and balance sheet, a low-risk investment allocation and a prudent reserving strategy. It is well positioned to delivery sustainable profitable growth'', he predicted.
