FBD says claims for accidental damage to cars are on the rise

The chief executive of insurer FBD, Tomás O’Midheach, said that the cost of motor repair labour and parts including paint has increased amid boarder inflation. He said that the scheduling of repairs is also often taking longer.

“There are two impacts in terms of accidental damage,” he said. “One is the actual cost of settlement. Typically, that’s gone up by about 17pc in the year. As that cost increases, people are more likely to make a claim. The number of notifications has gone up 11pc.

“Previously, people might have decided ‘Oh, I’ll cover that myself, it’s not going to cost much’,” said Mr O’Midheach. “Now they’re more likely to make a claim for accidental damage.”

He said the proportion of accidental damage claims is “really moving up” and the insurer told investors that there remains “considerable upward pressure on constituent costs”.

Now they’re more likely to make a claim for accidental damage

However, Mr O’Midheach pointed out that the personal injuries guidelines have resulted in lower amounts of injuries claims.

“They’re countervailing forces now really,” he added.

But the increases did little to dent FBD’s results for 2023. The stock market-listed insurer said that its profit after tax last year soared nearly 23pc to €81m. Its combined operating ratio – a key measure of profitability for insurance firms – was 81pc in 2023. A figure above 100 means that an insurance company is paying out more in claims than it is getting in premiums.

FBD’s insurance revenue climbed 8pc last year to €401m, while its gross written premiums were 8pc higher at €414m.

While there were more named storms in 2023 than in 2022, FBD noted that there were still a “lower number of attritional weather events” last year.

Large injury claims, which are for amounts greater than €250,000, that were notified in 2023 were also lower than the average in pre-Covid years.

The company saw the number of policies it has with customers increase 2.6pc last year, while average premiums rose 5.4pc. But of that latter rise, 4.5 percentage points was a result of increased levels of coverage, primarily as a result of higher property rebuild costs due to construction inflation.

FBD – which is listed on Dublin’s Euronext - also confirmed that it is looking at the merits of retaining a listing in London, noting that trading there as a percentage of overall trading volume in its shares has significantly reduced in recent years.

FBD chief financial officer Kate Tobin said that the cost of maintaining the listing isn’t high – between €25,000 and €30,000 a year – but that other factors have also prompted the review.

“We’ve access through Euronext to a wide variety of investors,” she said. “Over time, and following Brexit, we see greater risk of regulatory divergence.”

FBD’s annual report published on Friday also shows that Mr O’Midheach was paid a total of €1.15m last year, compared with almost €1.1m in 2022. His pay last year comprised a basic salary of €530,000 and a €544,000 bonus.