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FBD Holdings full year results 2016

(FBD plc own 24% of Holdings)

27 February 2017

FBD HOLDINGS PLC

PRELIMINARY ANNOUNCEMENT

For the year ended 31 December 2016

KEY HIGHLIGHTS

-- EUR11m profit before tax from continuing operations, including a one-time pension gain of EUR7m

-- Full year Combined Operating Ratio ("COR") of 99% helped by both our own strong underwriting actions and benign winter weather

-- Gross Written Premium of EUR362m, driven by a reduction in broker business, largely offset by price increases in some products along with strong retention of core customers
-- Improved risk selection and price adequacy driving a lower loss ratio
-- Further strong progress on strategic initiatives during 2016:

o Continued focus on Irish farm and small business (SME) sector underpinned by a single brand consumer strategy

o Successful completion of an enhanced transfer value (ETV) offering to deferred members of the defined benefit pension scheme resulted in an income statement gain of EUR7m and further reduces interest rate exposure in our Solvency Capital Requirement ("SCR")

o Further pricing and underwriting action has successfully returned the business to a modest full year underwriting profit

o Roll out of IT policy administration system in the second half of the year

FINANCIAL SUMMARY - EUR000s

Gross written premium 2016 = 361,799 , 2015 = 363,263
Underwriting profit/(loss) 2016 = 3,220 , 2015 = (125,412)
Profit/(loss) before taxation 2016 = 11,442 , 2015 = (85,905)*

Basic profit/(loss) per share 2016 = 26 Cents , 2015 = (€2.16)*
Net assets per share 2016 = €6.51 , 2015 = €6.23


-- Gross Written Premium down EUR1m compared to 2015 including a EUR15m reduction in business written through brokers

-- Average premium rate increases of 9%, offset by a 5% decline in policy volume from direct operations
-- COR of 99% compared to 140% last year
-- Net profit before tax of EUR11m from continuing operations
-- Annualised total investment return of 1.9%
-- Capital levels within target range of 110%-130% of ("SCR")

*2015 restated to exclude discontinued operations.

Commenting on these results, Fiona Muldoon, Group Chief Executive, said:

"I am pleased to note that FBD has returned to profit helped by an unusually mild winter so far and our own strong underwriting actions. Our strong customer relationships and the level of service we provide have ensured good retention in our key customer groups despite some of the necessary price increases they have experienced.

While we saw some degree of stabilisation in the cost of claims, we believe insurance premiums in Ireland are and will remain high until structural claims reform is successfully executed. We welcome the findings of the Government Cost of Insurance Working Group and the focus that it brings to the rising cost of claims for Irish customers. It is important that the Government follow through in translating these recommendations into policies and legislation that will deliver a lower cost, sustainable claims environment for the benefit of all customers. We look forward to working with others to ensure that these proposals are implemented in ways that will help Irish farmers, small businesses and consumers manage their insurance costs. In the absence of implementation of particular sections of a lengthy report we believe Irish insurance customers will continue to bear the cost of significantly higher premiums than those seen in other countries. Notwithstanding the challenges in our market I believe we are well positioned to make further progress during 2017".


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