There’s a “high risk” that insurance cost and claims reform will wither on the political agenda, according to FBD chief executive Fiona Muldoon.

She has blasted the snail’s pace of planned reforms but conceded that the strong set of full-year results posted by her stock market-listed insurance group yesterday does little to advance its cause in seeking reform.

The courts remain replete with cases where high awards have been made for relatively minor injuries, and also of claimants attempting to benefit financially from fraudulent claims.

“It is important that the industry, small businesses, motorists and all the people who are affected find a way to keep the Government focused on reform,” she told the Irish Independent. “That is the only way that you deliver a lasting change.”

It’s been two years since the Cost of Insurance Working Group delivered its report to government on the cost of motor insurance, and a year since its report on the cost of employer and public liability report was published.

While there have been some minor advances in tackling reform, Ms Muldoon said relatively very little has happened.

“We’re more than two years in,” she said. “There’s been more heat than light, an awful lot of talking and reporting and not that much by way of actual substantive change. In some respects, the average customer has gotten used to the increased prices. That means the political agenda has moved on slightly.”

She said that “most noise” and the “most pain” is currently in the SME sector, where businesses are finding it difficult in a low-inflation economy to carry price increases.

Ms Muldoon said reform needs “political will”. However, she said that a minority government doesn’t help that, and that wide-scale engagement with the judiciary is a place where the Government is “slow to go”.

FBD said that there had been “more moderate” inflation in claims during 2018, but said the overall cost of claims is still high. Its net claims totalled €183.4m last year, compared to €203.1m in 2017. The net cost to FBD of Storm Emma last year was €6.6m.

The insurance boss was speaking as FBD said it made a pre-tax profit of just over €50m in 2018, slightly more than the €49.7m it reported in 2017.

However, excluding an €11.8m charge FBD shouldered as it redeemed a €70m convertible bond that had been issued to Canadian financial group Fairfax, its pre-tax profit level would have been 24pc ahead.

FBD’s gross written premiums dipped by €1m to €371.5m. Its combined operating ratio – a key indicator of profitability – hit 81.2pc in 2018, compared to 86.2pc in 2017. The lower the figure below 100pc, the more profitable the firm is.

The company’s annualised total investment return from its just over €1bn in assets fell into negative territory in 2018, at -0.5pc.

That’s down to a tough investment environment, where FBD has 48pc of its investment assets in corporate bonds, 29pc in government bonds and 14pc in cash. FBD, as with other insurers, invests policy money that is held to cover claims. But the annualised rate of return on its investments has steadily fallen in recent years. Last year, the figure was 1.2pc.

It was hit in 2018 by widening spreads in the corporate and eurozone bond portfolio, and particularly eurozone bonds in Italy. It reduced its exposure to Italy by €15m during 2018. FBD increased its exposure to risk assets in 2018 by €33m to €55m.

It is still in the process of selling a legacy investment property in Dublin’s IFSC.

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