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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