FBD Holdings PLC Trading Statement (9715Q)
June 24 2020 - 9:50AM
UK Regulatory
TIDMFBH
RNS Number : 9715Q
FBD Holdings PLC
24 June 2020
FBD Holdings plc
FBD Insurance plc
24(th) June 2020
FBD Trading Update and AGM Notification
FBD Holdings plc ("FBD or the Group") announces a trading update
in addition to updating the market on its Annual General Meeting
(AGM) and the postponement of the proposed dividend for the 2019
Financial Year.
AGM and Dividend
FBD announces that its Board has decided to reschedule its AGM
to 31(st) July 2020. It was originally scheduled to take place on
8(th) May 2020 but was postponed in light of the developing
situation surrounding the impact of Covid-19, recommendations from
regulatory and public authorities, and consideration of the health
and safety of shareholders, other attendees and employees. Formal
notice of the AGM with details of all business to be conducted will
be issued to shareholders shortly. The format and attendance at the
AGM will be determined in accordance with the latest public health
advice.
On 27(th) February 2020, the Board proposed a final dividend for
the 2019 Financial Year of 100 cent per share. It was intended that
this dividend proposal be brought forward for approval at the AGM.
However, taking into account the statement issued in April by the
European Insurance and Occupational Pensions Authority (EIOPA)
urging the suspension of all discretionary dividend distributions,
the heightened uncertainty resulting from Covid 19 and the
importance of maintaining capital in the business, FBD has decided
not to proceed at this time with the proposed dividend payment for
the 2019 Financial Year. The Board will keep the timing of the
distribution of capital to shareholders under continuing review and
is confident that capital can be returned when the uncertainty from
Covid 19 has receded and the impact is more fully understood. The
solvency of the Group remains robust and is currently estimated at
178% even while continuing to deduct the 2019 dividend, treating it
as foreseeable.
Business Interruption Claims
On 25(th) May 2020 FBD announced an update in respect of
business interruption claims received, in particular with regard to
those sold to publicans, a nd our approach to seek a test case to
have the issues resolved as quickly as possible to achieve clarity
and minimise costs for all parties. We confirmed that litigation
between FBD and a number of publican customers claiming cover for
business interruption as a consequence of Covid-19 public health
measures, has been scheduled for hearing in the Commercial Court in
October 2020.
FBD remains strongly of the view that our business insurance
policies do not provide cover for a pandemic of this nature.
However, a precautionary reserve of EUR22m has been made to cover
costs that may be incurred and will be included in claims costs in
the Half Year financial results to 30(th) June 2020.
General Business Trends and Outlook
Gross Written Premium (GWP) trends were strong in the early part
of 2020 but are now being impacted by the deterioration in the
economy due to the Covid 19 pandemic. In the five months to 31(st)
May 2020 GWP is 3% lower than the same period in 2019. This is
before accounting for Covid 19 related premium refunds to
customers. Policy numbers have increased in the year to date by 1%
and there has been strong retention of existing customers. This has
been offset by reduced average premium due to competitive pressures
and a reduction in sums insured driven by the deterioration in the
economic environment.
In addition, FBD is in the process of refunding motor customers
as a result of the reduced car usage during the Covid 19 lockdown.
These motor refunds will cost FBD approximately EUR7m. Refunds are
also being offered to commercial customers whose businesses have
been closed for the Employers Liability/Public Liability/Business
Interruption elements of their cover for the closure period. We
expect commercial refunds to be an additional EUR7m
approximately.
The impact of these premium refunds on profits are offset by a
reduction in the frequency of motor injury, damage and liability
claims experienced from mid-March to date.
Overall motor, liability and property claims experience has been
benign and no significant weather events have occurred.
Investment markets have been severely impacted by Covid 19. Our
portfolio has been impacted primarily by falls in risk assets and
increasing credit spreads and the return on the portfolio year to
date has been approximately -1%.
Overall, current claims experience will help mitigate the impact
on profitability of refunds and business interruption costs. We
remain confident in the underlying profitability, future growth
prospects, capital strength of the business and in our ability to
continue to provide excellent service to our customers.
This announcement includes inside information.
Enquiries Telephone
FBD Holdings plc
Michael Sharpe, Investor Relations +353 87 9152914
Powerscourt
Jack Hickey +353 83 4488 339
About FBD Holdings plc
FBD is one of Ireland's largest property and casualty insurers,
looking after the insurance needs of farmers, consumers and
business owners. Established in the 1960s by farmers for farmers,
FBD has built on those roots in agriculture to become a leading
general insurer serving the needs of its direct agricultural, small
business and consumer customers throughout Ireland. It has a
network of 34 branches nationwide.
The following details relate to FBD's ordinary shares of EUR0.60
each which are publicly traded:
Listing Euronext Dublin UK Listing Authority
Listing Category Premium Premium (Equity)
Trading Venue Euronext Dublin London Stock Exchange
Market Main Securities Market Main Market
ISIN IE0003290289 IE0003290289
Ticker FBD.I or EG7.IR FBH.L
FBD Holdings plc, FBD House, Bluebell, Dublin 12
Registered in Dublin, Ireland Registered Number 135882
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END
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