FBD Insurance is set to unveil profits of at least €100m for its 2019 financial year, which would be double the €50m it made in 2018. In a trading update released last week, FBD said it expected pre-tax profits for its 2019 financial year to be significantly ahead of market expectations, with pre-tax profits set to exceed €100m.

FBD attributed its doubling in profits to the exceptionally benign weather in 2019, better than expected returns on investments, as well as strong development in its cash reserves.

Under stock market rules, a company is required to inform financial markets if its financial performance is substantially different to market expectations. It’s understood FBD’s forecasted profits are about €40m ahead of predictions by market analysts.

Shares in FBD jumped almost 10% following the announcement, to highs of €9.70, but have since fallen back below €9. The strong growth in profits could see FBD substantially increase its dividend payout to shareholders this year, above the €0.65 per share currently forecast.

Criticism

Unsurprisingly, the sharp increase in FBD’s profits has attracted criticism. Peter Boland of the Alliance for Insurance Reform accused the insurance industry of ripping off customers.

“This trading update from FBD only confirms what report after report has already confirmed – that motorists, small businesses and voluntary groups are being ripped off by insurers and lawyers. The untrammelled greed of insurance companies and lawyers is causing untold damage to whole sectors of Irish society,” said Boland.