Brexit remains ‘major concern’ for FBD despite upturn

Brexit remains a “major source of uncertainty” for insurance company FBD, but benign weather and an improved global economic outlook has led to a positive trading performance in the year to date, the company has said.

FBD issued a trading update to investors in advance of its annual general meeting in Dublin on Friday.

In the course of his address to shareholders at the AGM, FBD chairman Liam Herlihy will say the company's trading performance to date "has been good".

“The underlying profitability of the business is sound as we maintain our underwriting and pricing discipline in the face of continuing strong competition,” he said in the update.

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“Weather in the year to date has been benign with no significant events occurring.

“While the current low interest rate environment persists, the global macroeconomic outlook has improved compared to the fourth quarter of 2018. This has benefited our investment return in the year to date.”

Mr Herlihy said FBD has a strategy of growing its urban presence in a “disciplined fashion” and is continuing to maintain its large market share in rural Ireland through the delivery of “outstanding products and customer service”.

“Brexit, and its likely impact, remains a major source of uncertainty for FBD, Irish farmers and Irish businesses,” he continued.

“We continue to plan for any operational impacts which may arise and we will continue to support our customers through this transition.”

An analyst with Davy said FBD’s trading update “points to a positive start to the year”.

“Sound underwriting performance and benign weather to date indicate that performance is trending favourably to full-year guidance of a low 90s combined ratio,” he said.

“The investment book meanwhile has benefitted from the improved performance in global markets so far this year. Both factors indicate upside to our current year forecasts. We continue to like the stock and maintain our outperform rating.”