ANALYSIS:YESTERDAY'S FULL-YEAR results from FBD drew a positive reaction from analysts across the board, as the insurance company posted strong growth in operating profits.

Despite its note of caution – FBD predicts minimal growth in premiums this year as domestic demand continues to decline – the company delivered a strong operational performance last year, supported by a healthy underlying underwriting business, and aided by the first increase (albeit marginal) in gross premium written since 2007.

With a market cap of €259 million and a full-year dividend of 30.5 cent this year, FBD has also outperformed other financial stocks on the Iseq.

Often perceived as one of the less glamorous members of Ireland’s insurance community, FBD’s reputation for excessive conservatism has paid off.

While the company did get burned by exposure to property and hotel assets in Ireland and abroad, its initial investments in these areas date back to the 1980s, with the result that it avoided the same colossal level of exposure that has befallen other businesses.

As well as its prudent approach to solvency, FBD’s loyalty to its farming customers has proved astute.

Although the company has increased its share of the Dublin market by 5 per cent, farming customers continue to account for almost half of its overall business.

With the agri-business sector one of the shining lights in the Irish economic landscape, its decision to stick with its original customers was a wise move.

FBD stressed yesterday that the misfortunes of the Quinn group had minimal impact on FBD’s business.

It also underlined that it was never seriously in contention for parts of Quinn Insurance’s business.

Nonetheless, as the Quinn empire deals with the protracted fall-out from its own solvency issues, it may well be asking itself whether it should have taken a leaf out of the book of its older and wiser counterpart.

FBD: 2010 results

Operating Profit: €40.7m (+40.8%)

Pretax loss: €3m (-€34.6m)

Gross premium written: €358m (+0.3%)

Operating earnings per share: 106c (+41.3%)

Dividend: 31.5c (+5%)