Interim Management Statement
April 30 2010 - 4:30AM
UK Regulatory
TIDMFBH
RNS Number : 1181L
FBD Holdings PLC
30 April 2010
FBD Holdings plc
Interim Management Statement
30 April 2010
FBD Holdings plc ("FBD" or the "Group") is issuing the following interim
management statement covering the period from the year end to 31 March 2010,
which will be read by the Chairman at the Annual General Meeting to be held in
Dublin at 12 noon today.
Performance and outlook for 2010
Underwriting:
Premium rates have continued to harden in the Irish insurance market in the
first quarter of 2010, particularly for home and business insurance. Motor
rates have been slower to increase and are not yet at the point where it would
be prudent to grow our volumes. Gross premium written increased in the first
quarter, the first such increase since the first half of 2007. Although policy
volume continued to decline, the rate of decline decreased significantly and was
outweighed by the impact of rate increases.
After eight years of constantly falling premium income in the non-life insurance
market in Ireland, industry revenue is likely to be static or show marginal
growth in 2010. Despite understandable consumer sensitivity to increases in
premium, rate increases are required to provide the industry with an adequate
return on capital, particularly in light of the unprecedented severe weather
claims as a result of the flooding and freezes over the winter months.
Although three months is a relatively short period, it is encouraging that the
incidence of large claims was lower in the first quarter than in the
corresponding period of the previous year. Non-weather related property claims
frequencies have improved, partly attributable to the implementation of claims
management initiatives. The cost to FBD of claims arising due to the freezing
conditions in the month of January amounted to EUR12.0m, net of reinsurance.
In response to changing consumer behaviour, FBD continued to successfully
develop its multi channel distribution strategy. Examples include the success
of our local office network in protecting and developing farming and commercial
business, the growth of No Nonsense and significant take up of the on-line
renewal facility. FBD continues to increase its penetration in key urban areas,
in particular Dublin.
The Group has continued to focus on efficiency and productivity improvements,
implementing savings in both staff and non-staff costs and delivering
initiatives to reduce the cost of claims.
Non-Underwriting:
The property and leisure markets in Ireland and Spain continue to be challenging
and this will be compounded by the recent volcanic ash disruption and poor
weather conditions, which have affected occupancy and pre-bookings. Excess
supply exists in the hotel market, particularly in Ireland and the timing of
recovery is dependent on a reduction in industry capacity. Sales of units in La
Cala have exceeded expectations, with a positive cash flow impact and a marginal
profit benefit.
FBD Financial Services produced a solid result for the quarter, well ahead of
the previous year in a weak market for retail investment and life assurance
products. FBD Brokers continue to develop new market segments while providing
enhanced customer value.
Group:
FBD Group has maintained a strong capital base and balance sheet and continues
its strategy of prudent reserving. Given the Group's conservative portfolio of
investment assets and the reduction in volatility in international markets,
investment fluctuations were not significant in the quarter.
Conclusion
While economic uncertainty remains, volatility has reduced significantly in the
Irish economy. Barring exceptional claims events, the Board believes that the
Group will deliver 2010 operating earnings per share in line with the consensus
of analysts' expectation.*
The Board believes that FBD will continue to outperform its peers in delivering
superior returns to shareholders. FBD has demonstrated its capacity to deliver
operating profits in difficult market conditions and is well positioned to
deliver long-term profitable growth, particularly in an environment where
premium rates are hardening.
About FBD Holdings plc
FBD is Ireland's second largest property and casualty insurer looking after the
insurance needs of private individuals, farmers and business owners. The Group
has developed complementary financial service businesses and has hotel and
leisure property interests that include four hotels in Ireland and two resorts
in southern Spain. The Group was established in the 1960s and is quoted on the
Irish and London stock exchanges.
Forward Looking Statements
Some statements in this announcement are forward-looking. They represent
expectations for the Group's business, and involve risks and uncertainties.
These forward-looking statements are based on current expectations and
projections about future events. The Group believes that current expectations
and assumptions with respect to these forward-looking statements are reasonable.
However, because they involve known and unknown risks, uncertainties and other
factors, which are in some cases beyond the Group's control, actual results or
performance, may differ materially from those expressed or implied by such
forward-looking statements.
For Reference
Telephone
FBD
Andrew Langford, Group Chief Executive 01 409
3208
Cathal O'Caoimh, Group Finance Director 01 409
3208
Murray Consultants
Joe Murray
01 498 0300
This information is provided by RNS
The company news service from the London Stock Exchange
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