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FBD Holdings plc

FBD Holdings plc. 2008 Preliminary Results. 2008 Preliminary Results. Forward Looking Statements.

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FBD Holdings plc

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  1. FBD Holdings plc 2008 Preliminary Results

  2. 2008 Preliminary Results Forward Looking Statements This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Such forward-looking information involves risks and uncertainties that could affect expected results. 2

  3. Operational Growth in Market Share Premium rates hardening Cost improvements and claims initiatives Internet developments Realignment of local offices Financial Solid trading performance Adjusted operating profit of €65.8m Operating contributions from all divisions Continued de-risking of balance sheet Loss net of valuation adjustments 2008 Preliminary Results 2008 Highlights 3 FBD will benefit from positive operating leverage as prices rise

  4. 2008 Preliminary Results Continuing Growth in Market Share • Market GWP down 7.5% • FBD Average premium up 0.3% • FBD policy volume down 5.7% • FBD GWP down 5.5% • 650,000 policies at 31/12/08 • Market share up from 11.3% to 11.6% • Sustainable growth from core markets • Increasing Dublin penetration • Eighth consecutive year of growth • Third largest non-life insurer in Ireland • Market share growth validates rate increases • Underwriting discipline maintained • Excellent result in competitive market Growing market share, profitably

  5. Market Shares Gross Written Premium – 2008 Provisional 2008 Preliminary Results Total Market 2008 -€3,333m: 2007 -€3,604m: 2006 - €3,822m: 2005 - €3,841m: 2004 - €3,933m : 2003 - €4,239m: 2002 - €3,955m FBD Premium 2008- €386m: 2007 - €408m: 2006 - €407m: 2005 - €389m: 2004 - €351m: 2003 - €369m: 2002 - €326m 5

  6. Premium Pricing 2008 Preliminary Results • Market rates hardening since late 2008 • Covers wider / insured values higher • Claims costs increasing • FBD will benefit from positive operating leverage as prices rise Turning Point in Insurance Cycle

  7. 2008 Preliminary Results Claims Trends Loss Ratio FBD 2002 - 2008 • Claims ratio up from 68.2% to 79.1% • Unusual weather events in August 2008 • Higher property related claims – persistent poor weather • Risk of increase in “recessionary” claims • Claims initiatives • Increased resources to counter fraud • Continuing innovation in technology and process to improve settlement costs We aim to achieve early and cost effective settlements while providing our customers with a professional claims service that can realise competitive advantage through reduced premiums

  8. 2008 Preliminary Results Distribution Platform Changing • FBD.ie • NoNonsense.ie • Broker Initiatives • Metro Markets • In response to changing customer behaviour sales offices will focus on Agri & commercial business • Personal lines by phone or internet • Mullingar support centre investment completed Enhancing our business platform and operating capacity to extend our reach by meeting customers needs, cost effectively

  9. 2008 Highlights – Non Underwriting La Cala Lower property sales Focus on costs / special offers / new markets Sunset Excellent performance Another record year Tower Oversupply in the market We are outperforming competitors Financial Services Contribution from FBD Brokers maintained FBD Life refocused on pension and protection products Capital Fund Converted to cash 2008 Preliminary Results • Protecting Competitiveness • Cost Savings • Special offers • Developing new markets • Access to FBD database 9 Solid result in difficult trading conditions

  10. 2008 Preliminary Results Financial Highlights • Solid trading performance - €65.8m • Lower Long term return • Loss net of valuation adjustments • Continued de-risking of balance sheet • Strong capital base • Final dividend of 10c per share • Positive claims run-off • Total assets of €1,278m • Three times minimum statutory solvency • Prudent reserving policy 10 Well placed financially for growth

  11. 2008 Preliminary Results Income Statement Positive operating leverage as prices rise

  12. Income Statement (contd) 2008 Preliminary Results 12 Profitable at all points in the cycle

  13. 2008 Preliminary Results Income Statement (contd) 13 Valuation adjustments of €126.5m

  14. Underwriting Business – Asset Allocation 2008 Preliminary Results 14 Three times minimum statutory solvency requirements

  15. Group Assets – Valuation Adjustments 2008 Preliminary Results 15 Properties independently valued by professional external valuers

  16. 20 CLAIMS OUTSTANDING 2008 Preliminary Results Gross Claims Run-off Validates Reserve Release in 2007

  17. 2008 Preliminary Results Dividend Policy • FBD is committed to a robust capital position and well-managed balance sheet • Given market uncertainty it is appropriate to be prudent at this time • Recommended final 2008 dividend of 10c • Total 2008 dividend of 40.25c • 25% payout ratio, same as 2007 • Repatriations since 2005 of €546m • Special distribution of €1.50 in October 2008 Committed to progressive dividend policy

  18. 2008 Preliminary Results Outlook : Underwriting • A period of unprecedented economic volatility • FBD’s underwriting business, by it’s defensive nature, will be cushioned • Premium rates hardening • Further premium increases in market necessitated because: • Premiums have reduced too far • Increase in claims costs - weather and property • Severe weather in January 2009 • Lower investment returns 18 FBD well positioned to benefit from hardening market

  19. Outlook : Non Underwriting Leisure/Leisure Property Development Market conditions will continue to be challenging Marketing/sales initiatives to counter market conditions Management focused on operational efficiencies La Cala Land Sale Parallel planning procedure initiated If successful, substantial proportion will be delivered Dependent on local authorities Financial Services FBD Brokers will benefit from hardening market Focus on pension and protection products in FBD Life Consolidate customer relationships 2008 Preliminary Results 19 Difficult environment, but focus on maintaining profitability

  20. Robust underwriting business Positive operating leverage as prices rise Appropriate plans, people and infrastructure Growing market share, profitably Quality portfolio of property & leisure businesses Strong capital base and balance sheet Prudent reserving policy Continued de-risking of balance sheet 2008 Preliminary Results Proposition • Well positioned • To benefit from hardening market • To deliver long-term profitable growth • To produce superior returns for shareholders

  21. FBD Holdings plc 2008 Preliminary Results QUESTIONS? A.

  22. Balance Sheet - Assets 2008 Preliminary Results 22

  23. Balance Sheet - Liabilities 2008 Preliminary Results 23

  24. 2008 Preliminary Results Cash Flow Statement 24

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