Insurance group FBD Holdings has reported profits before tax of €49.7m for the year to the end of December, up sharply from profits of €11.4m the previous year.

The insurer said its underwriting profit for the year also rose to €44.9m from €3.2m in 2016.

The company has proposed a dividend of 24 cent per share after the improvement in its financial performance, sending its shares 14.8% higher in Dublin trade today.

It said it will target an annual 20-50% payout range of full year profits "when appropriate", recognising extreme weather events and inherent cyclicality.

FBD said the payment of a dividend was a major milestone for the company and reflected its confidence in the profitability and future prospects of the business. 

FBD had almost 2,200 claims to a value of €10-11m related to Storm Ophelia last year but the net cost to the company was €5.4m after some of the risk was shared with reinsurers.

Fiona Muldoon, the company's chief executive, said that after three years of "hard work and corrective action", the company delivered a strong underwriting profit for the year. 

Ms Muldoon said the company's target return on equity had also been exceeded 12 months ahead of schedule. 

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"FBD has displayed exceptional resilience and we are now well positioned to build on our loyal customer base.

"As we enter our 50th year of trading and as the only publicly quoted Irish insurer, FBD is here for farmers, businesses and consumers for the long-haul," she added.

In today's results statement, the company said that while the claims environment has shown signs of moderation, overall it remains difficult. 

"The average cost of claims continues to increase with higher levels of inflation observed in injury settlements,
particularly for more minor injury levels," it stated.

FDB said its net claims incurred last year amounted to €203.1m, down from a figure of €227.9m in 2016.

It also said the Motor Insurers' Bureau of Ireland levy reserve release of €5.6m is reflected in today's results after the Supreme Court ruling on the Setanta Insurance case. The case found that MIBI was not liable for third party motor insurer insolvency. 

It noted that the amended Book of Quantum has increased the level of damages awarded by the Injuries Board for most categories of injury. 

"Despite this development, the rejection rate of Injuries Board awards remains very high amongst claimants. FBD‟s rejection rate has increased by 30% since 2013, with significantly fewer claimants now accepting Injuries Board awards than previously," the company said.