FBD, the Republic’s only indigenous insurance company, said late on Tuesday that its pretax profit for 2023 will come in at a better-than-expected figure of about €80 million. It marks a third straight year that the company has moved to guide market expectations higher in the run-up to the unveiling of financial results.
The company put the strong profit figure down to “favourable underwriting performance arising from positive prior-year development”. This suggests the insurer will end up releasing some reserves it had previously set aside for claims that had turned out not to be as expensive as estimated.
The consensus view in the market was that FBD would post a profit of about €47 million for 2023.
The company, led by chief executive Tomás Ó Midheach, will publish its full-year results on March 8th.
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FBD pretax profits for 2021 came to €110.4 million, well over double what analysts had originally pencilled in, while its €73.7 million out-turn for 2022 year was twice what the market had expected before the company raised guidance in both years in advance of its official results announcements.
The better-than-expected results for 2023 are likely to feed expectations for higher dividends to shareholders. Last August the board of the insurer approved payment of a special €35.8 million dividend to shareholders in October. The company had paid out an annual dividend of €36 million earlier in the year on earnings for 2022.
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The introduction of judicial guidelines on personal injury awards in 2021 has led to a sharp fall in the average award by the Personal Injuries Assessment Board. Laws enacted last year to strengthen the board’s role are being rolled out on a phased basis.
Meanwhile, legislation aimed at balancing a property owner or business’s responsibilities with those of customers or the general public was enacted last July.
The reforms have attracted fresh entrants to the market. Australian insurer OUTsurance recently set up a base in Dublin and plans to start offering motor and home coverage in the Republic in the first half of this year. Italian insurance giant Generali agreed last year to buy Liberty Mutual’s businesses in Ireland, Spain and Portugal in a deal worth €2.3 billion.
The deal, expected to close soon, marks a return by the Italian group to the Irish general insurance market some 22 years after it closed its Dublin office, which had been writing small amounts of property and casualty business as well as commercial insurance at the time.
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