Insurance company FBD Holdings has reported an 18% drop in half year profits, which it partly blamed on double digit inflation in motor damage claims.
FBD's profit before tax fell to €32.3m for the six months to the end of June, down from €39.5m the same time last year, while its insurance revenue rose by 9.3% to €212.6m from €194.5m last year.
The company said its results were supported by continuing growth in Insurance revenue, increasing investment returns and favourable prior year reserve development, which was offset somewhat by weather and continuing frequency and inflation in Motor Damage and Property claims.
Average premiums increased by 8.3% across FBD's portfolio, with motor insurance premiums up by 5.6% on the back of increasing cost of motor damage claims as repair costs are higher due to rising costs of input - labour, paint costs and materials - and additional complexity due to advanced technology in newer cars.
Meanwhile, Home average premiums jumped by 11.%% on the back of increases in property sums insured as rebuild costs continued to grow, while Farm average premiums increased by 6.9% for similar reasons.
It noted that Motor Damage claims continues to see double digit inflation year on year, while Property claims increased substantially due to "significant" weather events in the first quarter, in particular Storm Isha.
The company said its Farmer sector performed well and delivered more than half of the company's premium growth, while new business volumes saw double digit increases over the six month period.
It reported underlying policy count growth across Farmer, Business and Retail sectors of 4.5%, but added that its overall policy growth of 1.1% was impacted by legacy scheme run-off during the year.
Retention rates remain consistently high in the first half of 2024, it added.
FBD noted that claims being settled under the Personal Injuries Guidelines continue to be more than 40% lower in value when compared to the previous Book of Quantum.
Tomás O'Midheach, FBD's CEO, said the company's Gross Written Premium (GWP) has grown by 10% year on year reflecting its 34-strong local office network, online offering and contact centre.
"Our Solvency Capital Ratio of 204% remains in excess of our stated risk appetite of 150-170%. This demonstrates the strength of the business and facilitates a second consecutive special dividend of 100 cent per ordinary share," the CEO said.
He said the business continued to grow over the period across all customer sectors, while the company's customer focused strategy has established a strong momentum, as seen in the increase in the number of new customers over the period and in the retention rates of its customers.
He also said the company made further progress in relation to ESG advocacy, where it recently announced, in partnership with UCD, an investment in a new agricultural research and education facilities at UCD Lyons Farm.
"This underscores FBD's commitment to supporting Ireland’s rural communities and the future of Irish agriculture," he added.
Shares in the insurance company moved higher in Dublin trade today.
