FBD Holdings ups estimate of the cost of flood and other weather related claims
Insurer FBD Holdings has increased its estimate of the cost of claims resulting from flooding and other weather related damage from last winter by €4m to €44m.
In a trading statement, the company also reported a 4% rise in its gross written premiums which is being driven by growth in car and commercial van insurance.
It said that overall it expects that its share of the insurance market is likely to have increased further in the year to date.
FBD said that increased economic activity leads to higher claims frequency with more cars driving more miles on increasingly congested roads. It pointed out that sales of fuel – a proxy for miles driven and motor insurance risk – is up 6% year on year.
Shares in the company closed down in Dublin trade today.
“This has had an impact on frequency of attritional motor claims which has risen sharply in recent months. The increase is not restricted to any one segment of our motor book. It applies equally across all customer profiles,” the company said in today’s statement.
Attritional motor claims relate to accidents which do not cause serious long term injury or fatality.
It said that growth in economic activity will have a positive effect on FBD in the medium term. But it cautioned it will have a higher than expected impact on profitability this year and the first half of 2015.
FBD said that the combined impact of the increase in claims frequency and the weather related claims will be €16m this year.
“As a result, the group is now guiding full year 2014 operating earnings per share of between 70 and 80 cents, excluding any further exceptional events that may arise,” the trading statement added.
This is down from its earlier expectations of operating earnings of between 120 to 130 cent.