Éowyn payout could reach €90m, says FBD chief

Tomás Ó Midheach, chief executive of FBD, said that while the net cost to the insurer from storm Éowyn would be in the region of €30m, “we would expect the overall amount we pay to our insured parties to a multiple of that, possibly two to three times”.

That would put the payouts in the region of €60m to €90m.

The difference between the sums paid out and the net cost to FBD is explained by FBD’s reinsurance programme.

Reinsurance is fundamentally insurance for insurance companies, giving them coverage for major or catastrophic events.

With Éowyn described in the company’s annual report as “the most significant storm event in FBD’s history”, it is exactly the kind of event which reinsurance programmes are designed to cover.

Ó Midheach also noted that, due to the insurer’s customer base – which is more rural and agricultural focused – FBD would have had a larger exposure to the storm than other insurers in the country.

The comments on Éowyn were included in FBD’s annual report for 2024. While that storm obviously had no effect on last year’s financial performance, there were some notable weather events which did hit the company’s bottom line.

FBD’s 2024 results

Profit before tax at €77.1m was down from 2023’s €81.4m, despite an increase in insurance revenue of 13% to €460m. Storm Isha in January and storm Darragh in December 2024 “contributed significantly” to the 23% increase in property related insurance claims last year, FBD said.

The net costs to FBD from the two storms was €14.7m.

FBD said that policy count increased by 33,000 during 2024, with average premiums rising by 5.8% during the year. Home premiums increased by 10.3% and farm premiums were 8.1% higher, which the company said “reflected increases in property sums insured as rebuild costs continued to rise”.

The insurer’s investment income in 2024 was at €26m, a €7m increase from the previous year. This was driven by a strong performance from FBD’s corporate bond portfolio and smaller losses on its investment property.

Shareholders

FBD announced a dividend of €1 per share, the same level as previous years. Investors who own shares in the insurer on 2 May 2025 will receive the payment on June 11.

While the company has also paid an second dividend of €1 per share in both 2023 and 2024, Ó Midheach said that it was too early in the year to give any indication of whether another one would be paid later this year.

Looking at the performance of FBD’s share price, it has been notably stable over the past year. It has gained around 7% from a year ago, and was trading above €13 a share this week.

The €1 dividend means that the insurer’s dividend yield (the return investors get for holding the shares expressed as a percentage) is currently around 7.5%.

A second €1 dividend, if it were to emerge later in the year would obviously double that yield for 2025.

This dividend yield is significantly higher than that which can be gained at either Kerry Group or Glanbia, which had dividend yields of around 1% and 2% respectively (payments of interim dividends would again increase those yields slightly, and the recent plunge in Glanbia’s share price has significantly increased that company’s dividend yield as the calculation is based on share price).

With the high return from holding the stock, it is notable how little trading actually happens in FBD’s shares.

The largest single holder of the company’s ordinary shares is Farmer Business Developments plc which owns around a quarter of FBD, and has maintained its holding unchanged for years.

In second place is the FBD Trust. The trust had a fixed shareholder of just under 3m shares, accounting for 8.5% of the total, for many years.

As previously reported by the Irish Farmers Journal, the trust had a change of policy in 2023 and started buying shares in the insurer. By the end of 2024, it had just over 5m shares, accounting for 14% of the total.

Sretaw Private Equity, chaired by former FBD chief Fiona Muldoon, is next in line with 4.1m shares.

While these large shareholders are obviously happy to hold the shares long term, FBD also has a very large number of smaller shareholders whose holdings can be traced back to the founding of the insurer.

Again, these shareholders tend not to trade their shares at all.

All of this means that there are very few shares in the company which are actively traded.

Looking at stock market information, it is not unusual for the number of shares traded daily to be in the low thousands, or even the hundreds. In the last year, the value of shares traded in one day has only surpassed €1m on seven occasions.

Executive pay

2024 saw chief executive Tomás Ó Midheach’s basic salary increase from €530,000 to €555,000. Adding in car, health and pension allowances, his fixed remuneration rose to €659,000.

He was also awarded a bonus of €656,000 during the year – a €112,000 increase from the previous year.

Last year was also the first year he has received a payment under FBD’s long-term incentive plan.

That was €788,000, meaning Ó Midheach’s total remuneration for the year was €2.083m, a huge increase from the previous year’s €1.156m.

The other executive, chief financial officer (CFO) Kate Tobin who was appointed on 1 January 2024, saw her total remuneration at €738,000 for the year which was €124,000 lower than what previous CFO John O’Grady received in 2023.

Interestingly, Tobin’s basic salary was €311,000, which was almost 10% lower than O’Grady’s.

When Ó Midheach was appointed CEO, he received basic pay that was more than 10% higher than what previous CEO Fiona Muldoon received in her last full year at the company.

FBD’s performance during the year could be described as steady, with no cause for concern visible in either the growth levels in the business or the risks it faces. The company’s reinsurance programme is proving its worth – significantly reducing the impact to profitability from major storm events.

Indicators like gross premiums written, policy count and solvency capital ratio all point to a healthy business.

There may be some discontent expressed at a significant jump in the salary of the CEO, but the incentive plan which led to the jump was overwhelming passed by shareholders some years ago, and while they will get another chance to have a say on that at the May AGM, the track record there suggests there will be little real opposition forthcoming.

The one slight mystery for the company is its share price.

FBD paid out €2 per share in dividends in both 2023 and 2024 and has so far announced another €1 for 2025.

While its share price has increased over that period, the dividend yield does make it seem a little cheap when compared to other listed shares of Irish agricultural interest.