Irish car, home and livestock insurer FBD (FBH) is in the midst of a strategic overhaul to reduce its exposure to brokered sales in preference for its core farming and small business customers, reached via its branch network. Premiums written through brokers last year declined €16m (£13.6m) or 44 per cent on 2015, which offset a 4 per cent increase in income from direct sales.
Excluding a €96m charge incurred last year to strengthen reserves and increase the margin for uncertainty, net claims were down 8 per cent to €218m. The frequency of motor injuries continued to decline thanks to management's past revision of its underwriting and risk selection approach. Together with relatively benign weather conditions during the period, this meant the insurer was able to reduce its combined ratio (of claims to income) to 99 per cent, from 140 per cent the previous year.
Management also carried out an enhanced transfer value exercise, offloading a proportion of its defined benefit pension liabilities. This resulted in a €7m gain to the insurer's income statement.
Following these results, analysts at house broker Shore Capital upgraded their forecast for adjusted net tangible assets at the end of December 2017 from 636¢ to 680¢.
FBD (FBH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 793¢ | MARKET VALUE: | €275m | |
| TOUCH: | 750-836¢ | 12-MONTH HIGH: | 801¢ | LOW: 558¢ |
| DIVIDEND YIELD: | nil | PE RATIO: | 95 | |
| NET ASSET VALUE: | 658¢ | COMBINED RATIO: | 99% | |
| Year to 31 Dec | Gross written premiums (€m) | Pre-tax profit (€m) | Investment return (€) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 344 | 52.2 | 25.0 | 42.25 |
| 2013 | 351 | 51.5 | 29.4 | 49 |
| 2014 | 364 | -4.94 | 26.1 | 51 |
| 2015 (restated) | 363 | -85.9 | 20.3 | nil |
| 2016 | 362 | 11.4 | 8.3 | nil |
| % change | - | - | -59 | - |
Ex-div: na Payment: na £1=€1.17 | ||||
