Insurer FBD says 2014 was the worst year for weather-related claims in its history. The company has just reported its annual results which show it made a pre-tax loss of €4.5m compared to a €51.5m profit in 2013. FBD incurred net claims worth €261m last year up almost 30% year-on-year. Storm damage-related claims from February last year alone cost it €15.2m with 9,000 of its customers directly affected by Storm Darwin. 

Andrew Langford, FBD's chief executive, says the insurer's weather related claims seen in the first half of last year were the worst in FBD's history but they were also the worst since records began about 150 years ago. Mr Langford says that about 9,000 FBD customers bore the brunt of the claims, adding that the very extreme weather hit the areas in which FBD is strongest. This gave rise to claims of just over €44m, but on the positive side, Mr Langford says that FBD was "very proud" of how it supported and delivered for its customers. "This is the business that we are in, this is why we are here, this is why people take out insurance and this is why customers choose insurers like FBD," he states.

Because of the nature of risks which FBD insure, which tend to be more rural, weather related issues affect the company more, Mr Langford explains. But he says the big feature of last year was a sharp increase in claims costs and the vast bulk of these was very much a market issue. At an industry level in general, customers are having more accidents and more claims as the economy has turned more sharply than expected and these claims are costing more. 

On premiums, Mr Langford that they are ultimately decided by claims experience and when costs go up, premiums have to follow. Because insurance operates very much on the basis of a pool risk, when claims rise - and especially when they rise as sharply as they have done - premiums will have to go up for all customers to some degree. He predicts that at this stage, premiums will rise by about 5-6% this year with higher increases for motor premiums.

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