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Weather-related claims made a massive dent in FBD's performance, sending it into a €3m pre-tax loss. Julien Behal/PA Wire

FBD premium hikes expected after surge in weather claims

Announcing performance figures for 2010, the insurer says the level of weather claims will mean increased premiums in 2011.

INSURANCE PROVIDER FBD has warned that it will be forced to increase the asking price for its premiums in the coming year, after the unusually harsh weather over the winter months led to an unexpected increase in the number of claims being lodged.

The insurer this morning issued preliminary performance figures for the 2010 year, which Reuters said were at the lower end of the range previously forecast.

The insurer’s chief executive Andrew Langford told Reuters that the company’s earnings-per-share had been expected to hit between €1.30 or €1.40 last year, but that the forecast had been based on an assumption of better weather, and a quicker recovery in the spending power of the consumer.

As a result, earnings had dipped to €1.06 per share.

The opportunities of the insurer being able to increase its premiums in the short-term were limited, however, given the poor expectations that customers would be able to shoulder such an increase.

The company’s trading profit rose by 41 per cent to €40.7m, while the value of the insurer’s premiums rose narrowly to €358.4m.

But despite a fall in net overall level of claims – which dropped by 11 per cent to €234.3m – the insurer stumped up over €90m in a total of 14,000 weather-related claims in a 14-month period.

Overall the company made a pre-tax loss of just over €3m, compared to a near-€35m loss in 2009.

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