FBD Holdings - still making losses

RNS Number : 9903G - 12 August 2016

FBD HOLDINGS PLC

Half Yearly Report
For the six months ended 30 June 2016

KEY HIGHLIGHTS
-- Gross Written Premium of EUR181m down 2%, largely driven by a reduction in broker business
-- Improved risk selection and price adequacy is driving a lower current year loss ratio
-- No further prior year loss development
-- Combined Operating Ratio ("COR") of 101%
-- EUR3.7m loss before tax in first half of 2016

-- Strong further progress with our turnaround setting FBD firmly on track for full year profitability in 2017 (including): -

1]Senior management appointments, including new Chief Financial Officer and Chief Commercial Officer
2]Insurance and Holdings Boards streamlined for greater oversight and control
3]A number of new Board appointments
4]Strong focus on Irish farm and small business sectors with a complementary single brand consumer strategy
5] Further pricing and underwriting actions taken

6] Launch of new IT policy administration system in June and further roll-out well underway


2016 FINANCIAL SUMMARY

Gross written premium €180,845,000
Underwriting loss €1,595,000
Loss before taxation €3,652,000

Basic loss per share - 9 Cents
Net assets per share - €6.07

-- Gross written premium down EUR4m with a EUR10m reduction in business written through brokers

-- Average premium rate increases of 11%, offset by an 7% decline in policy volume from direct operations
-- COR of 101% compared to a reported 167% for the same period last year
-- Net loss before tax of €3.7m from continued and discontinued operations
-- Annualised total investment return of 1.9%
-- Capital levels within target range of 110%-130% of Solvency Capital Requirement ("SCR")

Fiona Muldoon, Group Chief Executive, said:

"These results demonstrate that we are returning the business to profitability. There is increasing stability in our reserves with no further prior year development recorded since the strengthening that occurred one year ago. As expected, there was a net loss of EUR3.7m in the first half of 2016. We are firmly on track to deliver full year profitability in 2017. We remain focussed on our customer base in the Irish farm and small business sectors, backed up by a single brand consumer strategy. We will continue to serve that market in difficult trading circumstances.

We believe that structural reforms are necessary to tackle injury claims inflation and address the impact claims costs are having on the affordability of insurance for farmers, businesses and other consumers. The re-pricing of certain risk classes will need to continue for a further period to allow FBD to fully restore profitability for its shareholders. While FBD notes the various government and industry initiatives underway to identify the cause of claims and cost inflation, we believe there must be substantial reform to tackle these issues. In the absence of such reform we believe Irish insurance customers will bear the cost of much higher premiums than those seen in other countries."

So Holdings is still losing money, and doesn't see any profit this year. They claim they are "on track" to make profit next year.
"Live horse, and you'll get grass"