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FBD trims estimate of business-interruption costs
Pic: RollingNews.ie

10 Mar 2023 / business Print

FBD trims estimate of business-interruption costs

Insurer FBD has slightly lowered its estimate of costs linked to business-interruption insurance to €42 million, from a previous figure of €43 million.

The costs arise from a High Court ruling in 2021 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.

FBD has reached agreement with two of the four pub owners, but is awaiting a High Court ruling this year on the amount of losses to be covered before aiming to reach a final agreement with the remaining two.

Motor premiums fall

FBD recorded a pre-tax profit of €74 million for 2022 – down from €110 million in 2021. Underwriting profits fell to just under €86 million, while volatility on financial markets also hit its investment returns.

In its annual results statement, the insurer said its average premium rose by 0.6% during 2022, but motor premiums fell by just over 7%.

FBD said that the fall in motor premiums was due to a reduction in claims costs as a result of the new Personal Injury Guidelines, partially offset by the impact of increases in the costs of repairing motor damage.

It said that claims settled under the new guidelines were more than 40% lower when compared with the previous Book of Quantum.

Build-up of claims

Chief Executive Tomás Ó Midheach said, however, that there was still some uncertainty in the claims environment, as it awaited the outcome of a Supreme Court ruling on a challenge to the Personal Injury Guidelines to see how they would operate in practice.

FBD added that it was experiencing a build-up of older, higher-value injury claims, as practitioners awaited the ruling.

Its statement showed that commercial-business premiums increased by 5.6%, and farm premiums rose by 2.6%, mainly due to adjustments to sums insured to reflect inflation in construction costs.

Home-insurance premiums were up by just over 4%. 

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland