Shares in insurance group FBD Holdings sank 9% today after it said that trading conditions in the Irish insurance market remain challenging this year.
In an interim management statement ahead of its AGM today, FBD said that market rates continued to harden for both car insurance and business insurance.
It added that home insurance rates remain weak with increased competition for new businesses due to the absence of "significant weather events".
While it said that the economic recovery will ultimately boost FBD, the continuing significant uncertainty in the claims environment will impact the development of booked claims reserves and profitability this year.
It added that it has taken the appropriate underwriting and rating action to date and early indications show that these actions are restoring the business written in 2015 to profitability.
In today's trading update, the company said that its financial services businesses are performing broadly in line with the previous year.
It added that the trading performance of its property and leisure joint venture is on target, while its joint venture with Taylor Wimpey - the UK residential developer with operations in Spain - continues to perform well.
FBD said that given the headwinds in the claims environment, the company's board believes that its long term interests are best served by remaining "prudent" at this time.
To this end, the company has decided that no interim dividend will be declared in August and FBD said that a decision on any final dividend will be made when the 2015's financial results are known.
For the remainder of this year, FBD said it will seek to continue to restore profitability through risk selection improvements and rate increases where these are merited or required.
"The Board is confident that the rating actions already taken along with the exceptional service ethos of its employees will ensure that the group continues to deliver for its customers and that it will ultimately revert to delivering superior returns to shareholders over the insurance cycle," the company stated in today's statement.
Shares in FBD Holdings closed 4% lower in Dublin today.
