The insurance giant FBD says a surge in costly claims will knock its profits this year.
The company said today that it’s seen a rise in large compensation claims from motor accidents.
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And a trawl of previous payouts on accidents that happened in 2011 and 2012 means it also needs to set aside more money to deal with medical bills from claimants.
“Following a detailed review, there is no reason to believe that this development is systemic or that the experience will recur in future periods,” FBD said in a statement.
Overall between the rise in claims costs and losses from poor weather at the start of 2014, FBD’s profits will take a €30m hit.
FBD said the amount of insurance policies its sold so far this year rose by about 4% and it has raised prices on some products.
But shares in the company plunged 13% on opening for trading on the Irish stock exchange.
“The nature of the insurance business is that earnings will be influenced from time to time by volatility in claims costs and the fact that the industry is inherently cyclical. The board is confident that FBD is well positioned to outperform the market and deliver strong returns for shareholders,” the FBD statement added.
