REG - FBD Holdings PLC - Final Results
08/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240308:nRSH0626Ga&default-theme=true
RNS Number : 0626G FBD Holdings PLC 08 March 2024
FBD HOLDINGS PLC
8 March 2024
FBD HOLDINGS PLC
PRELIMINARY ANNOUNCEMENT
For the year ended 31 December 2023
KEY HIGHLIGHTS
· Profit Before Tax of €81m.
· Proposed dividend of 100c per share.
· Return on Equity (ROE) of 15%, giving a three-year average ROE
over 15%.
· Combined Operating Ratio (COR) of 81%, includes discounting,
reflecting continued underwriting discipline and benefitting from favourable
prior year reserve development including that related to Business
Interruption.
· Gross written premium (GWP) increase of 8% to €414m. Insurance
revenue increase of 6% to €401m.
· Policy count growth of 2.6%, from increase in product holdings
per customer and new business.
· Increased level of insurance coverage accounts for 4.5 percentage
points of the 5.4% increase in average premium.
· Positive investment portfolio return of 5.3% (€60m), 1.7%
(€19m) through the Income Statement and 3.6% (€41m) through Other
Comprehensive Income (OCI).
· Allocated capital of €4m for possible share repurchase.
· Our capital position remains strong with a Solvency Capital Ratio
(SCR) of 213% (unaudited) after ordinary dividend and share repurchase
compared to 226% at 31 December 2022.
· Meaningful contribution for ESG initiative of €2.5m for The
Padraig Walshe Centre for Sustainable Animal and Grassland Research to support
climate-related research in Irish agriculture.
· IFRS 17 is effective for insurance contract reporting since 1
January 2023 and all 2022 comparatives are restated, unless otherwise
specified. IFRS 9 has also been adopted.
FINANCIAL SUMMARY 2023 2022
€000s (restated)
€000s
Gross written premium 413,593 382,651
Underwriting result 76,459 89,653
Insurance revenue 401,026 379,697
Insurance service result 126,308 131,104
Profit before taxation 81,410 65,840
Loss ratio 53.5% 49.1%
Expense ratio 27.4% 27.3%
Combined operating ratio 80.9% 76.4%
Cent Cent
Basic earnings per share 194 161
Net asset value per share 1,330 1,276
A reconciliation between IFRS and non-IFRS measures is given in the
Alternative Performance Measures (APMs) on page 23-26.
· The largest element of Insurance revenue is GWP which increased
by 8% to €414m (2022: €383m) with over 70% of the increase coming through
from our Farmer and Business relationship customers.
· Underwriting result is €76m (2022: €90.0m) equating to an 81%
COR with favourable prior year reserve development being the key feature. The
current service combined ratio, which excludes prior year releases, is 95.1%.
The expense ratio remained stable at 27.4% (2022: 27.3%), despite inflationary
pressure on employee, IT and utility costs.
· A positive return for both equity and fixed income investments
resulted in a profit through the Income Statement of €19m (2022: -€11m)
and a profit through Other Comprehensive Income (OCI) of €41m (2022:
-€90m).
· Net Asset Value per share of 1,330 cent has increased from 1,276
cent (restated) at the end of 2022 as a result of profits during the year
being offset by ordinary and special dividends totalling €72m paid to
shareholders during 2023.
Commenting on these results Tomás Ó Midheach, Group Chief Executive, said:
"Building on our successful approach to date to drive measured profitable
growth, we are pleased to announce a robust result for 2023. This was
achieved as a result of strong returns from our business activities,
underpinned by our underwriting discipline. In addition, the result was
enhanced by favourable prior year reserve development.
We are acutely conscious of the economic environment as inflation and interest
rates increase costs with resultant impacts on our customers and our business.
FBD strives to ensure that our customers remain with us for the service they
receive and requires us to work with our customers to ensure they have
appropriate cover. We maintained our strong retention rates of our existing
valued customers, while also driving growth in new customer and policy count
numbers. Both of these performance factors are focused on meeting the needs
of our customers through the provision of a personalised service nationwide.
FBD remains a strongly capitalised business with a Solvency Capital Ratio in
excess of our stated risk appetite. We will continue to engage with our
stakeholders and to monitor our capital position with the intention of moving
closer to target capital.
In 2023, we demonstrated our commitment to sustainability in Ireland's
agriculture sector, and we are delighted to support financially 'The Padraig
Walshe Centre for Sustainable Animal and Grassland Research'. This centre will
facilitate research that can provide innovative solutions to improve the
environmental sustainability and efficiency of pasture-based systems.
I would like to thank the Board for their continued support and the wider FBD
team for their commitment and hard work. We firmly believe that our
relationship focused approach supported by a digitally enabled, data enriched
organisation is delivering for our customers and stakeholders alike. Looking
forward, we remain confident in the underlying profitability, future growth
prospects and capital strength of the business."
A presentation will be available on our Group website www.fbdgroup.com
(http://www.fbdgroup.com/) from 9.00 am today.
Enquiries Telephone
FBD
Fiona Meegan, Investor Relations +353 1 4194885
Drury Communications
Paddy Hughes +353 87 6167811
About FBD Holdings plc ("FBD")
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.
Consideration of Listing Arrangements
Trading on the London Stock Exchange as a percentage of overall trading volume
in the Company's ordinary shares has significantly reduced over recent years.
Consequently, the Board of FBD is now considering the merits and costs of
retaining the Company's listing on the London Stock Exchange and if
simplification of the listing structures would be beneficial for FBD. The
Company has a primary listing on the regulated market of Euronext Dublin which
offers shareholders the highest standard of protection, including compliance
with the UK Corporate Governance Code.
Forward Looking Statements
Some statements in this announcement are forward-looking. They represent
expectations for the Group's business, and involve risks and uncertainties.
These forward-looking statements are based on current expectations and
projections about future events. The Group believes that current expectations
and assumptions with respect to these forward-looking statements are
reasonable. However, because they involve known and unknown risks,
uncertainties and other factors, which are in some cases beyond the Group's
control, actual results or performance may differ materially from those
expressed or implied by such forward-looking statements.
The following details relate to FBD's ordinary shares of €0.60 each which
are publicly traded:
Listing Euronext Dublin Financial Conduct 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
OVERVIEW
The Group reported a profit before tax of €81.4m (2022: €65.8m), supported
by growth in Insurance revenue, profits generated from current year business,
favourable prior year reserve development of €44.4m and positive investment
returns of €19.1m (2022: -€10.8m).
IFRS 17 is effective for insurance contract reporting since 1 January 2023 and
all 2022 comparatives are restated, unless otherwise specified. IFRS 9 has
also been adopted.
INSURANCE SERVICE RESULT
Insurance Revenue
Insurance revenue is 5.6% higher at €401.0m (2022: €379.7m). Gross written
premium is the largest part of Insurance revenue and is 8.1% higher than 2022
at €413.6m (2022: €382.7m) primarily delivered from our Farmer and
Business customers, with strong growth in Agri including Tractor, Commercial
Business and Home products. Written policy count increased by 2.6% (2022:
2.8%) supported by a strong retention rate, particularly in Farm and Business
products.
Increased levels of policy coverage account for 4.5 percentage points of the
5.4% increase in average premium, driven primarily from property lines, as
rebuild costs and consequently sums insured have increased in response to
inflation in construction and other operational costs in the economic
environment. Farm multi-peril average premium increased by 5.6% and Home
average premium increased by 10.8% as a result of increases in property
elements as sums insured increased due to inflation in construction costs.
Commercial Business average premium increased by 5.3% driven by a combination
of sums insured increasing due to inflation in construction costs and
customers increasing liability cover levels. Private Motor average premium
increased by 2.9% and Commercial Motor increased by 3.6%, with rate increases
applied to offset the increased cost of Motor Damage claims stemming from
inflation in labour, parts and paint costs and the higher costs associated
with repair and replacement of advanced technology on newer vehicles. Average
Tractor premium increased by 9.1% due to a higher proportion of newer
tractors, increasing value of existing tractors and modest rate increases to
offset inflation in the cost of Motor Damage claims.
Insurance Service Expenses
Insurance service expenses (ISE) increased by €8.3m to €210.1m (2022:
€201.8m). The table below splits the ISE into Gross incurred claims, Changes
that relate to past service and Insurance acquisition expenses. The Gross
incurred claims increase of €14.3m reflects increasing costs due to
inflation, increased frequency in Property and Motor Damage and increased
policy count. Changes that relate to past service of €104.0m include prior
year reserve development, gross of reinsurance, including that related to
Business Interruption, as well as other IFRS 17 specific movements in the Risk
Adjustment and Discounting. The amount of Changes to past service that relate
to prior year best estimate reserve development, net of reinsurance, is
€44.4m (2022: €48.3m). Insurance acquisition expenses of €75.9m form
part of the ISE and are referenced below under Expenses.
Insurance Service Expenses Year-ended Year-ended
31 Dec 2023 31 Dec 2022
€000 €000
Gross incurred claims (238,133) (223,807)
Changes that relate to past service 103,990 92,564
Insurance acquisition expenses (75,909) (70,595)
Total Insurance service expenses (210,052) (201,838)
Injury notifications increased 4% year on year largely reflecting increased
policy count with a slight increase in frequency. The average cost of injury
claims settlements is down 3% in the last 12 months.
Claims being settled under the new guidelines continue to be more than 40%
lower in value when compared to the previous Book of Quantum. The level of
acceptance of Injuries Resolution Board awards by the end of 2022 across the
market was approaching pre-guideline levels at 48%. Higher acceptance rates
reduce the number of cases through the courts system attracting higher legal
costs. It will take time for the full impact to be known of the new guidelines
on claims settled through the litigation process.
Motor Damage notifications increased by 11% and settlement costs also
increased by 17%. There remains considerable upward pressure on constituent
costs (parts, labour and paint).
The average cost of Property claims increased by 16% since 2022, excluding
Business Interruption claims, due to a change in mix of claims and inflation,
with double digit increases in Escape of Water, Fire and Storm costs.
Weather and Large Claims
Net of reinsurance weather losses in 2023 were similar to that in 2022. There
was a higher frequency of named Storms in 2023 but a lower number of
attritional weather events.
Large injury claims, defined as a value greater than €250k, notified in 2023
are lower than the average of previous pre-Covid years.
Reinsurance
The reinsurance programme for 2024 was successfully renegotiated with some
changes to the expiring agreement, as more risk is retained at lower layers.
Reinsurance market conditions and pricing increases incurred over recent years
have diminished the value of lower layer protection. While the levels of
expected reinsurance recoveries will reduce as a result of the changes, the
reduced reinsurance premium would mean an expected net benefit to FBD in a
typical year. Overall we saw an increase in reinsurance rates for Property of
5.5% and Casualty of 8.5% on the comparable renewed cover.
For 2023, the net expense from reinsurance contracts held increased by
€17.9m due to a reduction in the level of expected recoveries relating to
Business Interruption claims, as a result of the reduction in the associated
gross best estimate, as well as increased reinsurance premium.
Expenses
The Group's expense ratio is 27.4% (2022: 27.3%). Insurance acquisition
expenses and Non-attributable expenses are combined to calculate the total
expense cost of €109.9m (2022: €103.6m). The 6% increase is made up of
inflationary impacts on salary costs, IT spend and other utility costs.
Commission also increased as our partnerships with intermediaries continue to
grow.
Other Provisions
Movement in other provisions increased by €9.9m to €18.3m (2022: €8.4m),
with the increase relating to the provision for our current estimate of the
cost of a constructive obligation arising from the deduction of State
subsidies paid to claimants under Business Interruption of €6.2m, as well as
the €2.5m ESG initiative for The Padraig Walshe Centre for Sustainable
Animal and Grassland Research. The other elements of the Movement in other
provisions are the Motor Insurers Bureau of Ireland (MIBI) levy and the Motor
Insurers Insolvency Compensation Fund (MIICF) contribution.
INDUSTRY ENVIRONMENT
An appeal to the Supreme Court in respect of the Personal Injury Guidelines
was heard at the end of February 2023. We are awaiting the Judgement but have
no indication as to the timeline for delivery. Court backlogs have eased, with
trial dates secured within pre-Covid timelines, however, we note Claimants'
Solicitors still have a greater say around the timing of cases being called
for trial. Injury claims settlement rates are down 9% year on year.
We still await the outcome of the review to determine if the Judiciary or the
Minister of Justice and Equality should be allowed to determine the discount
rate and review it at intervals. The delay in this decision may raise the
potential of a challenge to the discount rate. The Court & Civil Law
(Miscellaneous Provisions) Bill 2022 was signed into law in July 2023. Part 3
of the Act sets out that the indexation of periodic payment orders will no
longer be fixed solely on the Consumer Price Index. Instead, the indexation
rate will be set by ministerial regulations based on a broad range of more
flexible factors. A committee was established to consider and make
recommendations on a suitable indexation rate to the Minister. These
recommendations and ministerial regulations are still awaited.
The following legislative changes impacting insurance were enacted during
2023:
· Occupiers Liability Act 1995 - amendments were signed into law in
July as part of the Courts and Civil Law (Miscellaneous Provisions) Bill 2022.
This introduces the concept of "Voluntary Assumption of Risk", which seeks to
broaden the circumstances in which an occupier may be relieved of liability.
An amendment to the Act changes the "common duty of care" provisions.
· Irish Motor Insurance Database (IMID) - The next phase of the
previously named Motor Third Party Liability project (MTPL) requires sharing
of additional data on insured vehicles and drivers with Regulatory
Authorities.
· The Road Traffic Act (RTA) legislation has been extended to
better regulate the use of scramblers/quads and e-bike/e-scooters.
· Assisted Decision Making Act - The Act came into effect on the 26
April 2023. We are working on a number of changes including updating our
Vulnerable Customer Policy, scenario testing, reviewing the customer journey
and training.
A number of additional changes impacting insurance are progressing through the
legislative process:
· The Motor Insurance Directive (MID) primarily deals with the
scope of compulsory insurance broadening the potential scenarios where RTA
cover will apply.
· Flood Insurance Bill - The purpose of the bill is to provide for
fairness in the market for property insurance, which will force insurers to
offer flood cover to homes and businesses in flood affected areas.
· Protection of the Collective Interests of Consumers Bill 2023 -
Proposed legislation transposes an EU directive and gives designated
"Qualified Entities" the power to take enforcement action on behalf of a group
of consumers whose rights have been breached in Ireland or in another EU
country.
· Consumer Insurance Contracts (Amendment) Bill 2023 - This Bill
proposes to ban the use of "clauses of average" in non-life insurance
contracts.
GENERAL
FBD's Combined Operating Ratio (COR) was 80.9% (2022: 76.4%). The undiscounted
Combined Operating Ratio (COR) was 83.3% (2022: 79.1%). The calculation of COR
has changed under IFRS 17 (see APMs).
Investment Return
FBD's total investment return for 2023 is +5.3% (2022: -8.6%). The investment
return recognised in the Consolidated Income Statement is 1.7% (2022: -0.9%)
and in the Consolidated Statement of Other Comprehensive Income (OCI) is 3.6%
(2022: -7.7%). Despite ongoing volatility, investment markets rebounded from
the losses of 2022 with almost all asset classes ending the year in a positive
position relative to the previous year. Interest rate changes remained the
dominant driver of market movements with the majority of the gains earned in
the fourth quarter as signs of inflation abating and weakening growth
projections led to markets pricing in a series of interest rate cuts in major
developed markets.
While central banks remained cautious in their guidance, interest rates
dropped since the start of the year. The yield on the benchmark German 5 year
Bund decreased from 2.5% to 1.9% during 2023 as the market focus turned to ECB
interest rate cuts, while credit spreads also narrowed over the year. This
resulted in the buy and maintain bond portfolios experiencing significant
mark-to-market gains.
The higher interest rate environment experienced since mid-2022 has led to a
material increase in returns through the Income Statement from deposits and
bonds in 2023. Bond maturities continue to be reinvested at higher interest
rates, which is gradually increasing the income earned on these portfolios.
During the year, some of this increased return was offset by realised losses
on bonds sold to enhance longer-term yield and reduce risk. An increase in the
duration of these portfolios should lead to further future increases in
returns through the Consolidated Income Statement. Risk assets contributed
€12m to the overall income return offset by a drop in the valuation of our
investment property.
Financial Services and Other Group activities
The Group's financial services operations returned a loss before tax of
€1.1m for the period (2022: loss €0.1m) as revenue decreased by €0.7m
and costs increased by €0.4m due to inflationary increases and one-off
costs. Costs increased in the Holding Company by €2.6m to €5.7m primarily
relating to the €2.5m ESG initiative for The Padraig Walshe Centre for
Sustainable Animal and Grassland Research.
Earnings per share
The diluted earnings per share was 190 cent per ordinary share, compared to
157 cent (restated) per ordinary share in 2022.
Capital Return
The Group's Dividend Policy intends to reward shareholders through regular
annual dividends while retaining sufficient capital in order to maintain a
healthy capital adequacy to support future capital requirements. The Group has
a robust capital position and liquidity margins. Given the Group's strong
financial performance in 2023 the Board proposes to pay a dividend of 100 cent
per share for the 2023 financial year (2022 Ordinary dividend: 100c).
The Board also approved a special dividend of 100 cent per ordinary share
returning a portion of the excess capital to shareholders, which was approved
by the Board on 10 August 2023 and paid on 20 October 2023.
Subject to the approval of shareholders at the Annual General Meeting to be
held on 9 May 2024, the final dividend for 2023 will be paid on 7 June 2024 to
the holders of shares on the register on 3 May 2024. The dividend is subject
to dividend withholding tax ("DWT") except for shareholders who are exempt
from DWT and who have furnished a properly completed declaration of exemption
to the Company's Registrar from whom further details may be obtained.
The Company may deploy up to €4 million of capital to buy back shares in the
market within the authorities granted by shareholders. The purpose of any
share repurchases would be to offset dilution from the vesting of awards under
the employee share schemes.
STATEMENT OF FINANCIAL POSITION
Capital Position
Ordinary shareholders' funds at 31 December 2023 amounted to €477.0m (2022
restated: €454.0m). The increase in shareholders' funds is mainly
attributable to the following:
· Profit after tax for the year of €69.5m;
· Reduced by ordinary and special dividend payments related to the
2022 financial performance totalling €72.0m
· OCI Profit after tax for the year of €22.9m made up of:
o Mark to market gains on our Bond portfolio of €41.4m;
o Offset by
§ Insurance finance expense for insurance and reinsurance contracts issued
€13.6m;
§ A reduction in the Retirement benefit surplus of €1.6m; and
§ €3.3m of tax through Other Comprehensive Income.
· Movement in capital reserves of €2.6m.
Net assets per ordinary share are 1,330 cent, compared to 1,276 cent per share
(restated) at 31 December 2022.
Investment Allocation
The Group adopts a conservative investment strategy to ensure that its
insurance contract liabilities are matched by cash and fixed interest
securities of low risk and similar duration. Cash allocations fell and the
Company divested €32m from its bond portfolios to fund dividend payments
although mark-to-market gains saw the overall bond allocations increase. The
average credit quality of the corporate bond portfolio has remained at A- and
has seen a lower allocation to BBB rated bonds (38% vs 42% at 31 December
2022). An additional €15m was invested in Risk Assets although we remain
underweight the target allocation while the investment property allocation
reduced due to valuation decreases.
The allocation of the Group's investment assets is as follows:
31 December 2023 31 December 2022 (restated)
€m % €m %
Corporate bonds 575 49% 563 49%
Government bonds 281 24% 271 23%
Deposits and cash 145 12% 175 15%
Risk assets 161 14% 134 12%
Investment property 12 1% 15 1%
1,174 100% 1,158 100%
Solvency II
The latest Solvency Capital Ratio (SCR) is 213% (unaudited) after ordinary
dividend and share repurchase, which reduced from 226% in 2022. Profits
generated have been offset by distribution of capital and increased capital
requirements related to greater insurance exposure and market risk.
RISKS AND UNCERTAINTIES
The principal risks and uncertainties faced by the Group are outlined on pages
20 to 28 of the Group's Annual Report for the year ended 31 December 2023.
Inflation has moderated as energy price reductions flow through, and interest
rates are projected to reduce while still remaining at a relatively high
level. Risks to this outlook remain with wage demands being a potential driver
of continued above trend inflation while geopolitical tensions could cause
another spike in energy prices. Medium-term growth forecasts remain weak which
increases the risk of the stagflation (high inflation, low growth) scenario.
If rates do not come down as expected it risks causing further imbalances in
the global economic system as evidenced by the banking failures in 2023.
Geopolitical risk is also elevated due to ongoing conflicts while the US
Presidential election has the potential to cause volatility.
Inflation continues to impact materials and labour costs in the Motor and the
Construction industries which has a knock-on effect on claims costs. There is
a risk of continually increasing settlement costs in future years and
potentially higher injury claims costs in the near future as pressure mounts
on salary inflation.
The Personal Injury Guidelines are positively impacting the claims environment
although continuing challenges have resulted in delayed settlements, as well
as additional inflation, that may result in increased legal costs. A higher
degree of uncertainty still exists in the environment as the claims payment
patterns and average settlement costs of more recent years are a less reliable
future indicator and must be carefully considered by the Actuarial function
when arriving at claims projections.
The expectations that central banks now have the flexibility to cut interest
rates to mitigate a growth slowdown has led to a fall in bond yields. Equity
valuations improved based on the change in interest rate forecasts and are
susceptible to further increases in inflation as well as a sustained slowdown
in growth or a recession. Future financial market movements and their impact
on balance sheet valuations, pension surplus and investment income are unknown
and market risk is expected to remain high for the foreseeable future. The
Group's Investment Policy, which defines investment limits and rules and
ensures there is an optimum allocation of investments, is being continuously
monitored.
The Group continues to manage liquidity risk through ongoing monitoring of
forecast and actual cash flows. The Group's cash flow projections from its
financial assets are well matched to the cash flow projections of its
liabilities. The Group holds cash resources significantly higher than its
minimum liquidity requirement in order to mitigate any liquidity stress
events. All of the Group's fixed term deposits are with financial institutions
which have a minimum A- rating. The Group's asset allocation is outlined on
page 8.
Reinsurance is becoming more expensive as the cost of climate change is being
felt across the insurance industry with some risks being reassessed. Delaying
the transition to a greener economy will accelerate the effects of climate
change that could drive further increases in reinsurance and insurance costs.
Regular review of the Group's reinsurers' credit ratings and reinsurer's
outstanding balances is in place. All of the Group's reinsurers have a credit
rating of A- or better.
We continue to face a tightening employment market with shortages of skills in
some areas. An attractive and broader employee proposition is key to retaining
a talented workforce in this challenging environment. We offer flexible
working and continue to enhance professional and skills development
opportunities as well as investing in well-being initiatives to ensure our
employees feel supported and valued.
FBD model forward looking projections of key financial metrics on a periodic
basis based on an assessment of the likely operating environment over the next
number of years. The projections reflect changes of which we are aware and
other uncertainties that may impact future business plans and includes
assumptions on the potential impact on revenue, expenses, claims frequency,
claims severity, investment market movements and solvency. The output of the
modelling demonstrates that the Group is projected to be profitable and remain
in a strong capital position. However, the situation can change and unforeseen
challenges and events could occur. The solvency of the Group remains solid and
is currently at 213% (unaudited) (31 December 2022: 226%).
OUTLOOK
The economic outlook for 2024 is positive with more modest growth expectations
despite a slowdown in global demand and global trade complexities. Tighter
monetary policy since 2022 appears to be slowly impacting inflation, although
in 2024 inflation is expected to be impacted more by higher house and food
prices which means continuing financial pressure on households. The labour
market is expected to remain tight and may hold back growth expectations.
Challenges to the Personal Injury Guidelines are making their way through the
courts and although increased acceptance rates of awards from the Injuries
Resolution Board may indicate they are gaining more acceptance; the ultimate
impact is still unknown. The average cost of Motor Damage claims will continue
to increase with more electric and hybrid vehicles as a proportion of the
national fleet, leading to higher cost of repairs.
Income projections on our bond portfolios have increased in the years ahead
due to the impact of higher reinvestment rates as existing bonds mature.
Our sustainability journey continues. In December 2023 we announced our
commitment to an ESG initiative for The Padraig Walshe Centre for Sustainable
Animal and Grassland Research based in Teagasc Moorepark, Fermoy, Co Cork.
Research and innovation are essential to reducing greenhouse gas (GHG)
emissions, as Ireland strives to achieve climate neutrality by 2050.
FBD is resourcing and planning for additional disclosure requirements
associated with CSRD. FBD signed up to the UN Principles for Sustainable
Insurance as we commit to the challenging journey ahead of reporting under the
CSRD in early 2025. We are preparing our Science Based Targets for submission
to provide a benchmark for future decarbonisation improvements.
Relationships are at the heart of what we do as a people-centric business and
customers stay with us for the value they receive. We continue to invest in
our customer and employee propositions, making us a more digitally enabled
organisation, while continuing to deliver excellent service to our
ever-increasing number of customers. The global economic environment affects
all our customers, employees and businesses as inflation and interest rates
increase costs. This requires us to adapt and work harder to drive sustainable
profitable growth, while remaining disciplined around underwriting and costs
to ensure we continue to deliver for all our stakeholders.
FBD is profitable and growing and believes that this will continue, with a
Combined Operating Ratio* of low 90s being achievable in 2024.
*Please see the Alternative Performance Measures on pages 23 to 26 for the
definition of Combined Operating Ratio.
FBD HOLDINGS PLC
CONSOLIDATED INCOME STATEMENT
For the financial year ended 31 December 2023
( ) ( ) 2023 2022
( ) (restated)(1)
( ) ( ) €000s €000s
( ) ( ) ( ) ( )
Insurance revenue ( ) 401,026 379,697
Insurance service expenses (210,052) (201,838)
( )
Reinsurance expense (39,776) (34,814)
Change in amounts recoverable from reinsurers for incurred claims (24,890) (11,941)
Net expense from reinsurance contracts held (64,666) (46,755)
( )
Insurance service result 126,308 131,104
( )
Total investment return 19,094 (10,753)
Finance expense from insurance contracts issued (4,160) (8,731)
Finance income from reinsurance contracts held 1,249 1,389
Net insurance finance expenses (2,911) (7,342)
Net insurance and investment result 142,491 113,009
Other finance costs (2,559) (2,559)
Non-attributable expenses (34,018) (33,048)
Movement in other provisions (18,331) (8,403)
Revenue from contracts with customers 2,468 3,173
Financial services income and expenses (6,933) (6,045)
Revaluation of property, plant and equipment (1,708) (287)
Profit before taxation 81,410 65,840
Income taxation charge (11,869) (8,284)
Profit for the period 69,541 57,556
Attributable to:
Equity holders of the parent 69,541 57,556
( )
( ) ( ) 31/12/23
( ) 31/12/22
(restated)(1)
Earnings per share ( ) Cent Cent
( )
Basic ( ) 194 161
Diluted(2) ( ) 190 157
(1) On 1 January 2023, IFRS 17 'Insurance Contracts' became effective,
replacing IFRS 4 'Insurance Contacts'. The Group elected, as it met the
criteria for a temporary exemption, to defer the application of IFRS 9
'Financial Instruments' (replacing IAS 39) until 1 January 2023. See note 4
First time adoption of new accounting standards in the Annual Report 2023 for
transitional impact.
(2) Diluted earnings per share reflects the potential vesting of share-based
payments.
( )
( ) ( ) 31/12/23
( ) 31/12/22
(restated)(1)
Earnings per share ( ) Cent Cent
( )
Basic ( ) 194 161
Diluted(2) ( ) 190 157
(1) On 1 January 2023, IFRS 17 'Insurance Contracts' became effective,
replacing IFRS 4 'Insurance Contacts'. The Group elected, as it met the
criteria for a temporary exemption, to defer the application of IFRS 9
'Financial Instruments' (replacing IAS 39) until 1 January 2023. See note 4
First time adoption of new accounting standards in the Annual Report 2023 for
transitional impact.
(2) Diluted earnings per share reflects the potential vesting of share-based
payments.
FBD HOLDINGS PLC
Consolidated Statement of Comprehensive Income
For the financial year ended 31 December 2023
2023 2022
(restated)(1)
€000s €000s
Profit for the period 69,541 57,556
Items that will or may be reclassified to profit or loss in subsequent
periods:
Movement on investments in debt securities measured at FVOCI 39,423 (89,761)
Movement transferred to the Consolidated Income Statement on disposal during
the period
1,969 (41)
Finance (expense)/income from insurance contracts issued (17,253) 42,388
Finance income/(expense) from reinsurance contracts held 3,676 (8,202)
Income tax relating to these items (3,477) 6,951
Items that will not be reclassified to profit or loss:
Re-measurements of post-employment benefit obligations, before tax (1,608) (2,272)
Revaluation of owner occupied property (84) 5
Income tax relating to these items 229 282
Other comprehensive income/(expense) after taxation 22,875 (50,650)
Total comprehensive income for the period 92,416 6,906
Attributable to:
Equity holders of the parent 92,416 6,906
(1) On 1 January 2023, IFRS 17 'Insurance Contracts' became effective,
replacing IFRS 4 'Insurance Contacts'. The Group elected, as it met the
criteria for a temporary exemption, to defer the application of IFRS 9
'Financial Instruments' (replacing IAS 39) until 1 January 2023. See note 4
First time adoption of new accounting standards in the Annual Report 2023 for
transitional impact.
FBD HOLDINGS PLC
Consolidated Statement of FINANCIAL Position
For the financial year ended 31 December 2023
Assets 2023 2022 01/01/2022
(restated)(1) (restated)(1)
€000s €000s €000s
Cash and cash equivalents 142,399 165,240 170,976
Equity and debt instruments at fair value through profit or loss 161,178 134,094 138,767
Debt instruments at fair value through other comprehensive income
855,989 833,865 892,495
Deposits 2,885 10,000 -
Investment assets 1,020,052 977,959 1,031,262
Other receivables 17,150 15,148 15,910
Loans 478 568 560
Reinsurance contract assets 97,520 136,657 208,888
Retirement benefit surplus 7,044 8,499 10,901
Intangible assets 27,735 14,082 9,031
Policy administration system 17,926 23,683 27,982
Investment property 11,953 15,052 16,055
Right of use assets 3,503 4,290 5,078
Property, plant and equipment 20,821 22,745 24,178
Deferred taxation asset 493 3,629 -
Total assets 1,367,074 1,387,552 1,520,821
(1) On 1 January 2023, IFRS 17 'Insurance Contracts' became effective,
replacing IFRS 4 'Insurance Contacts'. The Group elected, as it met the
criteria for a temporary exemption, to defer the application of IFRS 9
'Financial Instruments' (replacing IAS 39) until 1 January 2023. See note 4
First time adoption of new accounting standards in the Annual Report 2023 for
transitional impact.
FBD HOLDINGS PLC
Consolidated Statement of FINANCIAL Position
For the financial year ended 31 December 2023
Liabilities and equity 2023 2022 01/01/2022
(restated)(1) (restated)(1)
€000s €000s €000s
Liabilities
Current taxation liabilities 2,230 2,399 6,437
Other payables 35,852 35,628 29,289
Other provisions 20,083 11,103 12,271
Reinsurance contract liabilities 480 610 788
Insurance contract liabilities 774,921 826,621 929,981
Lease liabilities 3,828 4,600 5,349
Subordinated debt 49,721 49,662 49,603
Deferred taxation liabilities - - 3,891
Total liabilities 887,115 930,623 1,037,609
Equity
Called up share capital presented as equity 21,744 21,583 21,409
Capital reserves 34,479 30,192 27,406
Retained earnings 444,617 450,318 430,899
Other reserves (23,804) (48,087) 575
Shareholders' funds equity interests 477,036 454,006 480,289
Preference share capital 2,923 2,923 2,923
Total equity 479,959 456,929 483,212
Total liabilities and equity 1,367,074 1,387,552 1,520,821
(1) On 1 January 2023, IFRS 17 'Insurance Contracts' became effective,
replacing IFRS 4 'Insurance Contacts'. The Group elected, as it met the
criteria for a temporary exemption, to defer the application of IFRS 9
'Financial Instruments' (replacing IAS 39) until 1 January 2023. See note 3
for updated accounting policies and note 4 for transitional impact in the
Annual Report 2023.
FBD HOLDINGS PLC
Consolidated Statement of Cash Flows
For the financial year ended 31 December 2023
2023 2022 (restated)(1)
€000s €000s
Cash flows from operating activities
Profit before taxation 81,410 65,840
Adjustments for:
Movement on investments classified as fair value (7,960) 19,616
Interest and dividend income (15,653) (10,998)
Depreciation/amortisation of property, plant and equipment, intangible assets
and policy administration system
12,012 13,239
Depreciation on right of use assets 787 788
Fair value movement on investment property 3,099 1,003
Revaluation of property, plant and equipment 1,708 287
Other non-cash adjustments 2,602 3,007
Operating cash flows before movement in working capital 78,005 92,782
Movement on insurance and reinsurance contract liabilities/assets (26,270) 2,879
Movement on other provisions 8,980 (1,168)
Movement on other receivables (3,961) 322
Movement on other payables 2,642 9,023
Cash generated from operations 59,396 103,838
Interest and dividend income received 17,854 11,510
Income taxes (paid)/refunded (12,161) (12,602)
Net cash generated from operating activities 65,089 102,746
Cash flows from investing activities
Purchase of investments classified as fair value through profit or loss (34,803) (25,312)
Sale of investments classified as fair value through profit or loss 19,041 13,573
Purchase of investments classified as FVOCI (135,372) (238,126)
Sale of investments classified as FVOCI 151,277 203,750
Purchase of property, plant and equipment (2,188) (1,288)
Additions to policy administration system (1,401) (4,566)
Purchase of intangible assets (16,186) (6,987)
Maturities of deposits invested with banks 10,000 -
Additional deposits invested with banks (2,885) (10,000)
Net cash used in investing activities (12,517) (68,956)
Cash flows from financing activities
Ordinary and preference dividends paid (72,026) (35,870)
Interest payment on subordinated debt (2,500) (2,500)
Principal elements of lease payments (955) (965)
Net cash used in financing activities (75,481) (39,335)
Net decrease in cash and cash equivalents (22,909) (5,545)
Cash and cash equivalents at the beginning of the period 165,240 170,976
Effect of exchange rate changes on cash and cash equivalents 68 (191)
Cash and cash equivalents at the end of the period 142,399 165,240
(1) On 1 January 2023, IFRS 17 'Insurance Contracts' became effective,
replacing IFRS 4 'Insurance Contacts'. The Group elected, as it met the
criteria for a temporary exemption, to defer the application of IFRS 9
'Financial Instruments' (replacing IAS 39) until 1 January 2023. See note 3
for updated accounting policies and note 4 for transitional impact in the
Annual Report 2023.
FBD Holdings plc
Consolidated Statement of Changes in Equity
For the financial year ended 31 December 2023
Call up share capital presented as equity Capital reserves Other reserves Retained earnings Attributable to ordinary shareholders Preference share capital Total equity
€000s €000s €000s €000s €000s €000s €000s
As at 31 December 2021, as previously reported 21,409 27,406 752 422,815 472,382 2,923 475,305
Impact of initial application of IFRS 17 (Note 4) - - (8,928) 17,190 8,262 - 8,262
Impact of initial application IFRS 9 (Note 4) - - 8,751 (9,106) (355) - (355)
Restated balance at 1 January 2022 21,409 27,406 575 430,899 480,289 2,923 483,212
Profit after taxation - - - 57,556 57,556 - 57,556
Other comprehensive expense for the year - - (48,662) (1,988) (50,650) - (50,650)
Total comprehensive (expense)/income for the year - - (48,662) 55,568 6,906 - 6,906
Dividends paid and approved on ordinary and preference shares - - - (35,870) (35,870) - (35,870)
Issue of ordinary shares* 174 105 - (279) - - -
Recognition of share-based payments - 2,681 - - 2,681 - 2,681
Balance at 31 December 2022 (restated) 21,583 30,192 (48,087) 450,318 454,006 2,923 456,929
As at 31 December 2022, as previously reported 21,583 30,192 755 370,258 422,788 2,923 425,711
Impact of application of IFRS 17 (Note 4) - - 20,984 10,518 31,502 - 31,502
Impact of application IFRS 9 (Note 4) - - (69,826) 69,542 (284) - (284)
Restated balance at 1 January 2023 21,583 30,192 (48,087) 450,318 454,006 2,923 456,929
Profit after taxation - - - 69,541 69,541 - 69,541
Other comprehensive (expense)/income for the period - - 24,283 (1,408) 22,875 - 22,875
Total comprehensive income for the period - - 24,283 68,133 92,416 - 92,416
Dividends paid and approved on ordinary and preference shares - - - (72,026) (72,026) - (72,026)
Issue of ordinary shares* 161 1,647 - (1,808) - - -
Recognition of share-based payments - 2,640 - - 2,640 - 2,640
Balance at 31 December 2023 21,744 34,479 (23,804) 444,617 477,036 2,923 479,959
* In 2022 and 2023 new ordinary shares were allotted to employees of FBD
Holdings plc as part of the performance share awards scheme.
FBD Holdings plc
Supplementary Information
For the year ended 31 December 2023
Note 1 INCOME TAXATION CHARGE
The effective tax rate for the period was 14.6% (2022: 12.6%) which is the
best estimate of the weighted average annual income tax rate expected for the
full year. The effective tax rate for the period was higher than the standard
Irish corporation tax rate of 12.5% primarily due to assumed higher
disallowable expenses in the period.
Note 2 EARNINGS PER €0.60 ORDINARY SHARE
The calculation of the basic and diluted earnings per share attributable to
the ordinary shareholders is based on the following data:
2023 2022 (restated)
Earnings €000s €000s
Profit for the year for the purpose of basic earnings per share 69,259 57,274
Profit for the year for the purpose of diluted earnings per share 69,259 57,274
Number of shares 2023 2022
No. No.
Weighted average number of ordinary shares for the purpose of basic earnings
per share (excludes treasury shares)
35,787,761 35,507,806
Weighted average number of ordinary shares for the purpose of diluted earnings
per share (excludes treasury shares)
36,650,830 36,424,983
Cent Cent
Basic earnings per share 194 161
Diluted earnings per share 190 157
The 'A' ordinary shares of €0.01 each that are in issue have no impact on
the earnings per share calculation.
The below table reconciles the profit attributable to the parent entity for
the year to the amounts used as the numerators in calculating basic and
diluted earnings per share for the year and the comparative year including the
individual effect of each class of instruments that affects earnings per
share:
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
Note 2 EARNINGS PER €0.60 ORDINARY SHARE (continued)
2023 2022 (restated)
€000s €000s
Profit attributable to the parent entity for the year 69,541 57,556
2023 dividend of 8.4 cent (2022: 8.4 cent) per share on 14% non-cumulative
preference shares of €0.60 each
(113) (113)
2023 dividend of 4.8 cent (2022: 4.8 cent) per share on 8% non-cumulative
preference shares of €0.60 each
(169) (169)
Profit for the year for the purpose of calculating basic and diluted earnings
69,259 57,274
The below table reconciles the weighted average number of ordinary shares used
as the denominator in calculating basic earnings per share to the weighted
average number of ordinary shares used as the denominator in calculating
diluted earnings per share including the individual effect of each class of
instruments that affects earnings per share:
2023 2022
No. No.
Weighted average number of ordinary shares for the purpose of calculating
basic earnings per share
35,787,761 35,507,806
Potential vesting of share-based payments 863,069 917,177
Weighted average number of ordinary shares for the purpose of calculating
diluted earnings per share
36,650,830 36,424,983
( )
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
Note 3 DIVIDENDS
2023 2022
€000s €000s
Paid during year:
2022 dividend of 8.4 cent (2021: 8.4 cent) per share on 14% non-cumulative
preference shares of €0.60 each
113 113
2022 dividend of 4.8 cent (2021: 4.8 cent) per share on 8% non-cumulative
preference shares of €0.60 each
169 169
2022 final dividend of 100.0 cent (2021: 100.0 cent) per share on ordinary
shares of €0.60 each
35,884 35,588
2023 special dividend of 100.0 cent (2021: 0.0 cent) per share on ordinary
shares of €0.60 each
35,860 -
Total dividends paid 72,026 35,870
2023 2022
€000s €000s
Proposed:
2023 dividend of 8.4 cent (2022: 8.4 cent) per share on 14% non-cumulative
preference shares of €0.60 each
113 113
2023 dividend of 4.8 cent (2022: 4.8 cent) per share on 8% non-cumulative
preference shares of €0.60 each
169 169
2023 final dividend of 100.0 cent (2022: 100.0 cent) per share on ordinary
shares of €0.60 each
35,857 35,588
Total dividends proposed 36,139 35,870
The proposed dividend excludes any amounts due on outstanding share awards as
at 31 December 2023 that are due to vest in March 2024 and is subject to
approval by shareholders at the AGM on 9 May 2024. The proposed dividends have
not been included as a liability in the Consolidated Statement of Financial
Position as at 31 December 2023.
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
Note 4 CALLED UP SHARE CAPITAL PRESENTED AS EQUITY
Number 2023 2022
€000s €000s
(i) Ordinary shares of €0.60 each
Authorised:
At the beginning and the end of the year 51,326,000 30,796 30,796
Issued and fully paid:
At 1 January 2022 35,461,206 - 21,277
Issued during the year 290,078 - 174
At the end of the year 35,751,284 - 21,451
Issued and fully paid:
At 1 January 2023 35,751,284 21,451 -
Issued during the year 269,688 161 -
At the end of the year 36,020,972 21,612 -
(ii) 'A' Ordinary shares of €0.01 each
Authorised:
At the beginning and the end of the year 120,000,000 1,200 1,200
Issued and fully paid:
At the beginning and the end of the year 13,169,428 132 132
Total - issued and fully paid 21,744 21,583
The 'A' ordinary shares of €0.01 each are non-voting. They are
non-transferable except only to the Company. Other than a right to a return
of paid up capital of €0.01 per 'A' ordinary share in the event of a winding
up, the 'A' ordinary shares have no right to participate in the capital or the
profits of the Company.
The holders of the two classes of non-cumulative preference shares rank ahead
of the two classes of ordinary shares in the event of a winding up. Before any
dividend can be declared on the ordinary shares of €0.60 each, the dividend
on the non-cumulative preference shares must firstly be declared or paid.
The number of ordinary shares of €0.60 each held as treasury shares at the
beginning (and the maximum number held during the year) was 164,005 (2022:
164,005). No ordinary shares were reissued from treasury during the year under
the FBD Performance Plan. The number of ordinary shares of €0.60 each held
as treasury shares at the end of the year was 164,005 (2022: 164,005). This
represented 0.5% (2022: 0.5%) of the shares of this class in issue and had a
nominal value of €98,403 (2022: €98,403). There were no ordinary shares of
€0.60 each purchased by the Company during the year.
The weighted average number of ordinary shares of €0.60 each in the earnings
per share calculation has been reduced by the number of such shares held in
treasury.
All issued shares have been fully paid.
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
Note 5 TRANSACTIONS WITH RELATED PARTIES
Farmer Business Developments plc and FBD Trust Company Ltd have a substantial
shareholding in the Group at 31 December 2023. Details of their shareholdings
and related party transactions are set out in the Annual Report.
Both companies have subordinated debt investment in the Group. Farmer Business
Developments plc holds a €21.0m investment and FBD Trust Ltd holds a
€12.0m investment. During 2023 interest payments of €1.1m and €0.6m were
made to Farmer Business Developments plc and FBD Trust Company Ltd
respectively. Please refer to note 27 in the Annual Report.
At 31 December 2023 the intercompany balances (FBD Holdings plc) with other
subsidiaries was a receivable of €4,350,000 (2022: receivable of
€5,867,000).
For the purposes of the disclosure requirements of IAS 24, the term "key
management personnel" (i.e. those persons having authority and responsibility
for planning, directing and controlling the activities of the Group) comprises
the Board of Directors and Company Secretary of FBD Holdings plc and the
Group's primary subsidiary, FBD Insurance plc and the members of the Executive
Management Team.
The remuneration of key management personnel ("KMP") during the year was as
follows:
2023 2022
€000s €000s
Short term employee benefits(1) 5,077 4,730
Post-employment benefits 306 275
Share-based payments 1,436 1,386
Charge to the Consolidated Income Statement 6,819 6,391
(1)Short term benefits include fees to Non-Executive Directors, salaries and
other short-term benefits to all key management personnel.
Full disclosure in relation to the 2023 and 2022 compensation entitlements and
share awards of the Board of Directors is provided in the Annual Report.
At 31 December 2023 KMP had loans to the value of €16,535 with the Group
(December 2022: €19,085). KMP loans with the Group did not exceed these
values at any stage during the year.
In common with all shareholders, Directors received payments/distributions
related to their holdings of shares in the Company during the year, amounting
in total to €146,000 (2022: €50,000).
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
Note 6 Underwriting RESULT
2023 2022
(restated)
€000s €000s
Insurance revenue 401,026 379,697
Gross incurred claims (238,133) (223,807)
Changes that relate to past service 103,990 92,564
Insurance acquisition expenses (75,909) (70,595)
Insurance service expenses (210,052) (201,838)
Net expense from reinsurance contacts (64,666) (46,755)
Non-attributable expenses (34,018) (33,048)
Other provisions (15,831)* (8,403)
Underwriting result 76,459 89,653
*Excludes the ESG initiative contribution of €2,500,000 for The Padraig
Walshe Centre for Sustainable Animal and Grassland Research.
Note 7 Subsequent Events
There have been no subsequent events which would have a material impact on the
financial statements.
Note 8 General Information and Accounting Policies
The financial information set out in this document does not constitute full
statutory financial statements for the years ended 31 December 2023 or 2022
but is derived from same. The Group financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs) as adopted
by the European Union, applicable Irish law and the listing Rules of Euronext
Dublin, the Financial Conduct Authority and comply with Article 4 of the EU
IAS Regulation.
The 2023 and 2022 financial statements have been audited and received
unqualified audit reports.
The 2023 financial statements were approved by the Board of Directors on 7
March 2024.
The Consolidated financial statements are prepared under the historical cost
convention as modified by the revaluation of property, investments held for
trading, available for sale investments and investment property which are
measured at fair value.
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
ALTERNATIVE PERFORMANCE MEASURES (APM's) (unaudited)
The Group uses the following alternative performance measures: Loss ratio,
expense ratio, combined operating ratio, undiscounted combined operating
ratio, actual investment return, net asset value per share, return on equity,
underwriting result and gross written premium.
Changes to APMs
The Group has adopted IFRS 17 'Insurance Contracts' and IFRS 9 'Financial
Instruments' from 1 January 2023. The adoption of IFRS 17 has brought
significant changes to the measurement and presentation for insurance and
reinsurance contracts. Consequently, we have introduced new APMs in 2023 that
provide useful information under the standard:
· Undiscounted loss ratio
· Undiscounted combined operating ratio
· Gross written premium
In addition, we have made certain changes to existing APMs to ensure that they
remain relevant and useful for stakeholders. The Group adjusted loss ratio,
expense ratio, combined operating ratio and underwriting result APM's reflect
the implementation of IFRS 17.
Loss ratio (LR), expense ratio (ER) and combined operating ratio (COR) and
underwriting result are widely used as a performance measure by insurers and
give users of the financial statements an understanding of the underwriting
performance of the entity. Investment return is used widely as a performance
measure to give users of financial statements an understanding of the
performance of an entity's investment portfolio. Net asset value per share
(NAV) is a widely used performance measure which provides the users of the
financial statements the book value per share. Return on equity (ROE) is also
a widely used profitability ratio that measures an entity's ability to
generate profits from its shareholder investments. Gross written premium is a
component of insurance revenue and is widely used across the general insurance
industry.
The calculation of the APMs is based on the following
data:
Year ended 31/12/23 Year ended 31/12/22 (restated)
€000s €000s
Loss ratio
Incurred claims and other expenses 238,133 223,807
Changes that relate to past service - changes in FCF relating to the LIC
(103,990) (92,564)
Net expense from reinsurance contracts held 64,666 46,755
Movement in other provisions(1) 15,831 8,403
Total claims incurred and movement in other provisions
214,640 186,401
Insurance revenue 401,026 379,697
Loss ratio (Total claims incurred and movement in other provisions/Insurance
revenue)
53.5% 49.1%
(1)ESG initiative of €2.5m has been excluded as not insurance related
Year ended 31/12/23 Year ended 31/12/22 (restated)
€000s €000s
Undiscounted loss ratio(3)
Incurred claims and other expenses(2) 247,340 235,179
Changes that relate to past service - changes in FCF(2) relating to the LIC(2)
(101,455) (90,696)
Net expense from reinsurance contracts held(2) 62,359 43,680
Movement in other provisions(2) 15,831 8,403
Total claims incurred and movement in other provisions
224,075 196,566
Insurance revenue 401,026 379,697
Undiscounted loss ratio (Total claims incurred and movement in other
provisions/Insurance revenue)
55.9% 51.8%
(1)ESG initiative of €2.5m has been excluded as not insurance related.
(2)These items cannot be reconciled to the financial statements.
(3)The difference between the undiscounted loss ratio and discounted loss
ratio is the effect of discounting only, which has been determined in line
with accounting policy 3 (E).
Expense ratio
Amortisation of insurance acquisition cash flow 75,909 70,595
Non-attributable expenses 34,018 33,048
Total insurance acquisition and non-attributable expenses
109,927 103,643
Insurance revenue 401,026 379,697
Expense ratio (Total insurance acquisition and non-attributable expenses
/Insurance revenue)
27.4% 27.3%
% %
Combined operating ratio
Loss ratio 53.5 49.1
Expense ratio 27.4 27.3
Combined operating ratio (Loss ratio + Expense ratio) 80.9 76.4
Undiscounted Combined operating ratio
Undiscounted loss ratio 55.9 51.8
Expense ratio 27.4 27.3
Undiscounted Combined operating ratio (Undiscounted loss ratio + Expense
ratio)
83.3 79.1
FBD Holdings plc
Supplementary Information (continued)
For the year ended 31 December 2023
ALTERNATIVE PERFORMANCE MEASURES (APM's) (unaudited)
Year ended 31/12/23 Year ended 31/12/22 (restated)
€000s €000s
Actual investment return
Investment return recognised in consolidated income statement 19,094 (10,753)
Investment return recognised in statement of comprehensive income
41,392 (89,802)
Actual investment return 60,486 (100,555)
Average investment assets 1,137,746 1,169,411
Investment return (Actual investment return/ Average investment assets)
5.3% (8.6%)
Net asset value per share (NAV per share)
Shareholders' funds - equity interests 477,036 454,006
Number of shares No. No.
Closing number of ordinary shares (excluding Treasury) 35,856,967 35,587,279
Cent Cent
Net asset value per share (Shareholders' funds/Closing number of ordinary
shares)
1,330 1,276
Return on Equity €000s €000s
Weighted Average (WA) equity attributable to ordinary shareholders 465,521 467,148
Result for the period 69,541 57,556
ROE (Result for the period/WA equity attributable to ordinary shareholders) % %
15 12
Underwriting result €000s €000s
Insurance service result 126,308 131,104
Non-attributable expenses (34,018) (33,048)
Other provisions* (15,831) (8,403)
Underwriting result 76,459 89,653
* ESG initiative of €2.5m has been excluded as not insurance related
Gross written premium €000s €000s
Insurance revenue 401,026 379,697
Less: Instalment premium(1) (4,430) (4,291)
Add: Movement in unearned premium(1) 16,997 7,245
Gross written premium 413,593 382,651
(1)These items cannot be reconciled to the financial statements
Gross written premium: the total premium on insurance underwritten by an
insurer or reinsurer during a specific period, before deduction of reinsurance
premium.
Underwriting result: Insurance service result less non-attributable expenses
and movement in other insurance related provisions.
Expense ratio: Insurance acquisition expenses and non-attributable expenses as
a percentage of insurance revenue.
Loss ratio: Claims incurred net of reinsurance result as a percentage of
insurance revenue.
Combined operating ratio: the sum of the loss ratio and expense ratio. A
combined operating ratio below 100% indicates profitable insurance results. A
combined operating ratio over 100% indicates unprofitable results.
Undiscounted combined operating ratio: the sum of the undiscounted loss ratio
and expense ratio. A combined operating ratio below 100% indicates profitable
insurance results. A combined operating ratio over 100% indicates unprofitable
results.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAXDXEESLEFARecent news on FBD Holdings
See all newsREG - FBD Holdings PLC - Holding(s) in Company
AnnouncementREG - FBD Trust Company FBD Holdings PLC - Holding(s) in Company
AnnouncementREG - FBD Holdings PLC - Holding(s) in Company
AnnouncementREG - FBD Holdings PLC - Director/PDMR Shareholding
AnnouncementREG - FBD Holdings PLC - Total Voting Rights
Announcement