TIDMFBH
RNS Number : 3247T
FBD Holdings PLC
19 November 2013
FBD HOLDINGS PLC
Interim Management Statement
19 November 2013
FBD Holdings plc ('FBD' or the 'Group') issues the following
Interim Management Statement covering the period from 1 July 2013
to date, in accordance with the reporting requirements of the EU
Transparency Directive.
Highlights
-- Growth in premium income and further market share gains.
-- Launch of a car insurance offering through brokers under the Clan Insurance brand.
-- Profit after tax for year to September in line with
expectation, aided by strong investment performance.
-- FBD Insurance continues to maintain a strong capital base of
71% of net earned premium (or 345% of minimum solvency margin) and
a reserving ratio of 240%.
-- Full year operating earnings per share* guidance reaffirmed in the range of 145 to 155 cent.
Premium
FBD's gross written premium increased by more than 2% in the
first nine months of 2013, an improvement on the 0.7% growth in the
first half. The Group continues to outperform the market, which we
estimate has declined by approximately 2% to 3% in the nine
months.
Policy volume has increased further and there is early evidence
of rates hardening in the market for certain lines of business,
particularly car and business insurance. FBD maintained its
underwriting discipline to ensure it can deliver superior and
sustainable returns to shareholders.
FBD constantly evolves to respond to the needs of its customers.
Further progress has been made in meeting farming customers' needs
with the Group winning additional farm customers in the second half
of 2013 to date. FBD.ie and NoNonsense.ie are attracting growing
numbers of consumers and the development of relationships with
insurance brokers to increase our penetration of the business
insurance market is progressing positively. In September, FBD
launched a car insurance offering in partnership with brokers under
the Clan Insurance brand.
Claims experience
The Group continues its focus on managing claims costs,
particularly in those areas within its control including risk
selection, claims management initiatives and underwriting
improvements. There has been no increase in the frequency of FBD
bodily injury claims and the attritional loss ratio is comparable
to 2012. As previously advised, FBD experienced a small number of
very large accident and liability claims (cost greater than EUR1m)
in the early months of 2013. The number of such claims is random
and will be very volatile, especially over a short period, but will
revert to norm over time. Although that reversion to norm began in
the second half, the Group has experienced a further small number
of such claims and therefore the full-year experience of these
claims is likely to be ahead of historic norms.
In contrast, severe weather experience has been benign year to
date. The combined cost of severe weather and very large claims
will fluctuate from year to year - in 2011 and 2012, for example,
it was well below a multi-year average - and the Group's decision
making process focuses on longer-term trends.
The Group maintains its focus on efficiency and productivity
improvements to maintain FBD's competitive cost structure.
Financial services
FBD's financial services operations delivered solid performances
in difficult market conditions and an increasing proportion of
insurance customers are availing of premium instalment
services.
Profit after taxation
The Group generated an annualised return on investments of 3.2%
in the nine months to September as a result of its tactical
low-risk investment allocation - an allocation to bank deposits
instead of medium term bonds. Bank deposits and equities have both
delivered positive returns while medium term bonds would have
generated negative returns year to date.
Trading performance in the property and leisure joint venture
improved further over the peak summer period with growth in
occupancy, rates and revenue per room, particularly in the Irish
market. Year to date, the trading performance, cash generation and
the Group's share of the profits of the joint venture are all ahead
of both last year and budget.
Group profit after taxation for the nine months to September
2013 is in line with expectation.
Financial position
FBD Insurance continues to have a strong capital base and
balance sheet and a prudent reserving strategy as evidenced by a
reserving ratio of 240% at end September 2013 (December 2012:
232%). The long history of positive run-offs has continued in the
first nine months of 2013. At end September 2013, capital available
was 71% of net earned premium, which represents 345% of the minimum
solvency margin.
Given the continued uncertainty of global investment markets,
FBD has maintained its low-risk tactical investment allocation,
prioritising capital preservation over rate of return, and avoiding
material investment in the medium term bond market. This short-term
tactical allocation minimises volatility and continues to be
appropriate.
The Board is committed to strong solvency and liquidity margins
while at the same time focusing on efficient use of capital and
delivering a superior return on equity.
Guidance
FBD will focus on achieving profitable and sustainable growth,
maintaining underwriting discipline and constantly evolving its
business to reflect customers' needs. Further opportunities to
maintain FBD's cost competitiveness will be identified and
implemented. The Group is well positioned to deliver profitable
growth and superior returns to shareholders in the future.
On the assumption that large claims revert to norm and barring
exceptional weather events during the remainder of the year, the
Group reaffirms previous guidance of full year operating earnings
per share* in the range of 145 to 155 cent.
*Operating earnings per share is based on longer term rates of
return.
For Reference
Murray Consultants
Joe Heron +353 1 498 0300
About FBD Holdings plc ("FBD")
FBD is one of Ireland's largest property and casualty insurers
looking after the insurance needs of farmers, business owners and
consumers. FBD has consistently outperformed the market offering
unique and unrivaled products to over 600,000 policy holders and
satisfied customers through FBD Insurance, No Nonsense.ie and Clan
Insurance.
The following details relate to FBD's ordinary shares of EUR0.60
each which are publicly traded:
Listing Irish Stock Exchange UK Listing Authority
Listing Category Premium Premium (Equity)
Trading Venue Irish Stock Exchange London Stock Exchange
Market Main Securities Market Main Market
ISIN IE0003290289 IE0003290289
Ticker FBD.I FBH.L
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.
FBD Holdings plc FBD House, Bluebell, Dublin 12
Registered in Dublin, Ireland Registered Number 135882
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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