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Farmer Business Developments plc - FBDplc

1 August 2018

FBD HOLDINGS PLC (in which FBDplc has a 24% stake) - Half yearly Report for the Six Months ended 30 June 2018


-- Profit before tax of EUR18m
-- Combined Operating Ratio ("COR") of 88.6% includes net of reinsurance Storm Emma costs of EUR6.6m and positive prior year reserve development of EUR6.0m.

-- Gross Written Premium up 1% to EUR192m
-- Half Year annualised Return On Equity (ROE) of 12%
-- Careful growth and disciplined underwriting delivers excellent underwriting profits
o Premium and new business policy count growth

o Reinsurance program has protected from significant adverse weather

o Digital enhancements to improving customer experience

o New Dublin office on Baggot Street and ongoing investment in nationwide branch network

2018 2017

Gross written premium 191,985 189,650
Underwriting profit 18,934 11,072
Profit before taxation 18,423 11,919

Loss ratio 63.3% 70.5%
Expense ratio 25.3% 22.6%
Combined operating ratio 88.6% 93.1%

Cent Cent
Basic earnings per share 46 30
Net asset value per share 800 688

-- Gross Written Premium of EUR192m, EUR2m higher than 2017 (EUR190m). Strong customer retention combined with increased new business in Consumer, Commercial and Farm.

-- Net profit before tax of EUR18.4m, compared to EUR11.9m in 2017.
-- COR of 88.6% compared to 93.1% in 2017. Includes positive prior year development of EUR6.0m and net Storm Emma costs of EUR6.6m.

-- Annualised total investment return of -0.4% (2017: 0.7%)
-- Expense ratio of 25.3%, 2.7% higher than last year primarily as a result of the once-off impact in 2017 of the closure of the property reinsurance surplus treaty.

-- Investment returns continue to be poor in a volatile environment emphasising the need for continued underwriting discipline.

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

"This is a very strong set of results for the first half of 2018 particularly in the context of a major snow storm in March. Despite adverse weather, challenging investment returns and a competitive market, the team has delivered a healthy profit of EUR18m for the first half of the year. We are pleased with our new business levels and we continue to build our business in Farm, Commercial and Consumer through our quality products and our direct relationships with our customers.

The cost of injury claims remains a challenge for Irish customers. We look forward to the Personal Injuries Commission report and we urge the Government to follow up in order to provide a lower cost, sustainable claims environment for the benefit of all insurance customers particularly Irish businesses. We continue to work hard to ensure that all new proposals will deliver for Irish farmers, businesses and consumers, who continue to bear the cost of significantly higher premiums than those seen in other countries.

We were delighted to open our Baggot Street Branch last week and we will use this office as a base to offer commercial insurance to many Dublin based businesses. We are also looking forward to the launch of our motor insurance partnership with Post Insurance in the coming months. "

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FBDplc - Farmer Business Developments PLC