For all of the financial benefits and public glory, life at the top of the corporate world can occasionally be as punishing as it is rewarding. Friday brought a sense of this with the unexpected departure of Andrew Langford, the long-time chief executive of FBD, the insurance firm.
Langford had led the firm for seven years and worked for it for 12 before that, but his departure will be immediate. FBD has not had a good time of late. Last year brought two profit warnings, with 2015 seeing a pull-back from car insurance and talk of “challenging” market conditions.
The company, which has been independent for more than 45 years, has seen its shares plummet in line with the bad news. At the start of 2014, they were trading at about €17: on Friday, they closed at €7.65, having shed more than 10 per cent on the day alone.
In a statement informing the company’s staff of his departure, Langford said his time with FBD had been “very enjoyable”, although it is hard to see how the last 18 months or so could have brought much pleasure. This newspaper asked him in March, as the retrenchment of the motor business was announced, if he had considered resignation. He said he had not and remained focused on returning FBD to profitability. For whatever reason, that position has changed.
It is perhaps counterintuitive that FBD should be struggling as the economy rebounds but it most definitely is, as are many of its peers.
A June report from the Central Bank found that the non-life insurance sector is relying on investment income to support profits, with motor, property and liability businesses all under pressure.
One factor behind this is a relatively recent High Court judgment that changed the methodology for calculating a large personal injury award, but FBD has also cited more basic issues in its various public statements this year.
In motor insurance, the company has pointed to more claims and in other areas, the “worst weather experience” in the company’s history has been to blame. In May, FBD pointed to continuing hardening in both car and business insurance, and increased competition for home-insurance business. In other words, the headwinds are multiple and FBD has been battling them for a long time, perhaps too long in the case of Langford.
More colour on the state of the company is likely to emerge when it reports half-year results on August 25th, with that presentation likely to be made by former Central Banker and FBD finance director Fiona Muldoon, who has been named as interim chief executive. As for Langford, he told staff he would be exploring "some new challenges and opportunities".
