Insurer FBD Holdings swung from a €85.9m loss to a pre-tax profit of €11.4m last year. The 2016 profit included a one-off pension gain of €7m according to annual results published this morning. Average premiums last year rose by 9%.
The company had been forced to take a €96m charge last year to strengthen its reserves which were not sufficient to meet the prior year's claims. FBD Holdings' chief executive Fiona Muldoon said that issue is now fully behind the company and its premium levels held up well in 2016, while retention of its core customers was also a strong feature of the results. Ms Muldoon said the company saw a 9% increase in premiums across the board, while it also saw a 5% decline in policy volumes. She said she believed that FBD "has now stabilised".
Mild winter weather also boosted the company's profits. Ms Muldoon said this time last year the country was affected by bad floods and those floods cost it about €11m. She also said that the recent Storm Doris is not expected to generate a lot of claims, and only about 200 reasonably small claims have been made.
On rising premiums, the FBD CEO said that while claims are stabilising they are not yet in a stable environment and the company continues to believe that insurance premiums are high - much higher than they are in other countries. She said that they are unlikely to come down until claim costs have stopped rising. "The premiums of many continue to pay for the claims of the few", she stated. There are a number of areas where claims costs have risen and Ms Muldoon said the company would like to see the Government work on those aspects of their report to bring down claims costs for everyone, so in turn premiums could also be reduced for everyone.
Ms Muldoon said the Government's insurance report is a very lengthy one with 33 recommendations and 71 action points. She said it needs to have a level of prioritisation and focus brought to that. FBD would like to see the Personal Injuries Board have increasing powers so that medicals can be mandated, while it would also like the commission to benchmark awards internationally. In area of the fraud, Ms Muldoon said that the proposed increase in data sharing and the technology that will allow automatic number plate recognition and so allow uninsured drivers be caught as law-abiding motorists are paying in their policies for those drivers as well.
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MORNING BRIEFS - Insurance cost Irish hoteliers an average of €730 a room last year. Research carried out by the Irish Hotels Federation ahead of its annual conference in Killarney, which gets underway today, shows the total insurance bill for the sector hit €42m last year. The IHF said what it called "runaway increases" in insurance costs were unsustainable and need to be addressed. The federation takes issue, specifically, with the guidelines for personal injury compensation here. The amounts in the Book of Quantum, which gives guidance for awards in personal injury claims, are "out of kilter" when compared to other countries, it says. The guideline amount for a fractured ankle, for example, rose from €35,500 to €54,700 when the Book of Quantum was updated last October. The IHF says the award for an equivalent personal injury claim in the UK would be £10,000 - less than €12,000.
*** Consumers were more likely to put off the purchase of big ticket items such as furniture or electrical goods in January, according to the latest Economic Pulse report from Bank of Ireland. It said concerns about the possible impact of Brexit and protectionist policies championed by US President Donald Trump have led households to scale back their assessment of the general economic situation. Asked about their attitude to making a big purchase, 33% of consumers said they would consider now a good time to buy compared to 44% in January. Business confidence was unchanged in February, however. Few of the firms surveyed pointed to Brexit or Trump-fuelled uncertainty according to Bank of Ireland.
