Insurer FBD has reported pre-tax profits of €19 million for the first half of 2022 – down from €22 million in the same period last year.

While its underwriting profits jumped from €13 million to €34.5 million, higher interest rates and volatility in stock markets hit its investment returns.

The company said that its average premium in the period was flat, with motor premiums down by 8%.

Commercial-business premiums rose by 6%, however, and farm premiums increased by 2%. FBD said that business customers had increased their cover as trading conditions improved after COVID-19 restrictions were eased. Home insurance premiums were up 2%.

Guidelines ‘having effect’

FBD has slightly lowered its estimate of costs linked to business-interruption insurance to €43 million.

The costs arose after a High Court ruling last year in a test case involving four pub owners. The court ruled that the businesses were entitled to be compensated under their policies for the disruption caused by COVID-19 restrictions.

Chief executive Tomás Ó’Midheach said that the Personal Injury Guidelines appeared to be having the desired effect of lowering costs for minor injury claims, but he added that the company would await the outcome of the remaining legal challenges to the guidelines, and their application by the courts.

Higher costs

The insurer said that, while backlogs in the courts were reducing, these legal challenges had slowed the pace of settlements, and that it continued to experience a build-up of older, higher-value injury claims.

Claims volumes increased by 5%, but the average cost of injury settlements was slightly lower than pre-COVID levels.

FBD said, however, that inflation was affecting the cost of property and motor-damage claims, due to higher building costs and costs of repairs, respectively.