FBD, the Republic’s only indigenous insurer, has moved to calm fears that recent major storms are a “harbinger of things to come” and that consumers could face higher premiums down the road.
Personal finance experts have in recent months warned that an increase in extreme weather events, like Storm Daragh in December and Storm Éowyn a month later, will lead to an upward trend in home insurance premiums over time.
In its annual results, published on Friday, FBD described Storm Éowyn as the single biggest storm in its history. Speaking later, chief executive Tomás Ó Midheach said the amount the insurer will pay out to affected customers is likely to be in the region of €60 million to €90 million.
Mr Ó Midheach said FBD was “disproportionately affected” by wind storms because of the size of its agri business, with farms more exposed to wind.
While insurers are precluded by law from signalling on price, Mr Ó Midheach said the group takes account of “many factors” when setting premiums, but added: “It is not a guarantee [wind storms] are going to be more prevalent.
“We have to consider the immediate impacts [when setting premiums], but we don’t view [recent months] as a harbinger of many, many storms.”
He said FBD frequently runs models on wind events, and has established they tend to come in “clusters” with “a couple between the winter and the spring” every five or six years.
“We are in the middle of a cluster at the moment,” he said. “We’re not sure that in a timeframe of five to 10 years that wind storms are more likely than they have been up to now.”
Mr Ó Midheach was speaking to The Irish Times after the insurer reported a profit before tax of €77.1 million for the financial year ended December 31st, 2024, which was down from €81.4 million in 2023.
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The fall was largely due to its underwriting result reducing to €66 million last year from €76 million in 2023.
Insurance revenue was 10 per cent higher at €441 million. Gross written premium was the largest part of insurance revenue, and was 12.5 per cent higher than 2023 at €460.2 million. The farmer, business, and retail sectors all grew.
Its overall profit for the period, after tax, was €67.2 million, which was down from €69.6 million.
The group’s policy count increased by 6.3 per cent with 33,000 additional policies written, while market share increased across the board. Retention rates remained “consistently high”, particularly in the farm and business sectors.
Average premiums increased by 5.8 per cent across the portfolio, half of which related to customers increasing their level of insurance cover and changing business mix, with some premium increases applied due to inflationary impacts.
Private motor average premium increased by 5.5 per cent, which FBD attributed to high levels of inflation more claims.
Home and farm average premiums increased by 10.3 per cent and 8.1 per cent respectively, reflecting “increases in property sums insured as rebuild costs continued to rise”. Insurance service expenses increased by €68.4 million to €278.5 million.
Injury settlement costs remained in line with prior year, but were 7 per cent lower than 2020, signalling a “generally positive trend” since the introduction of the Personal Injury Guidelines in 2021.
The Judicial Council has recommended a 16.7 per cent increase of the guidelines, and Mr Ó Midheach said he accepted “consideration has to be given” to increases if a balance is to be maintained between lower premiums and “fairness on the part of the claimant”.
The board proposes to pay an ordinary dividend of 100 cent per share for the 2024 financial year, which is in line with the previous year.
