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FBD Holdings plc
2007 Preliminary Results
22
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.
2007 Preliminary Results
3
Contents 2007 Highlights Page
• Underwriting 4
• Non-Underwriting 8
• Corporate 9
Summary Financial Statements
• Income Statement 10
• Balance Sheet 13
• Statement of Changes in Equity 15
• Cash Flow Statement 16
• Return on Equity 17
• Gross Claims Run Off 18
2007 Market Share 19
Outlook 20
44
2007 Highlights : Underwriting
Excellent Top line performance• FBD Premium…………………up…………… 0.2%• Irish Market premium (IIF) …..down…………5.7%
Market Share……………increase to………….11.3%
Claims reserves• €107m credited to income following review of reserving policy
2007 Preliminary Results
5
Support Centre• Purpose: to be an integral, cost efficient, element in FBD’s
platform to deliver increased sales and superior customer care.
• February 2007……commenced , 50 staff
• December 2007…. 150 staff
• Calls handled in H2: 2007…….. 340,000
• Branch Office migration…………….20 offices at year end
• Additional time available to branch staff to focus on sales opportunities
2007 Highlights : Underwriting
2007 Preliminary Results
6
2007 Highlights : Underwriting
Strategic Developments Unit Established• “No Nonsense” car insurance….. New stand-alone internet budget
priced car product developed• E-commerce development and other initiatives to extend customer
reach advanced
Organisation strengthened…. New appointments/new roles
• Manager – Strategic Developments• Manager – I.T.• Manager – Insurance Products• Manager – E-Commerce Solutions
• Manager – Retail Sales• Manager – Marketing• Manager – Sales Operations• Manager – Support Centre
……….Sales potential and customer care enhanced………
2007 Preliminary Results
77
2007 Highlights : Underwriting
Investments • Reduction in equity exposure• Restructuring of bond portfolio to reduce volatility
2007 Preliminary Results
88
2007 Highlights : Non-Underwriting
La Cala• 43 property handovers (2006: 38)
Sunset Beach• Record hotel occupancy… 85,000 apartment nights• Record revenues and profits
Tower Hotels• Budgets surpassed in challenging market
Financial Services• New business growth ………an increased contribution
2007 Preliminary Results
9
2007 Highlights : Corporate Capital Management
Distribution of €177m of reserves (June 2007) Share buybacks of €53m Continued Ordinary Dividend Growth
2007 Preliminary Results
19.5 2227.5
40
57.5
69
79.5
0
10
20
30
40
50
60
70
80
2001 2002 2003 2004 2005 2006 2007
FBD
Ordinary Dividend Growth (cent)
1010
Income Statement
2007 2006
€000s €000s %
Gross written premiums 407,953 407,256 +0.2%
Net earned premiums 350,321 345,959 +1.3%
Adjusted net claims incurred* (239,054) (224,712) +6.4%
Net operating expenses (51,928) (44,705) +16.2%
Adjusted Underwriting Result* 59,339 76,542 -22.5%
Adjusted Loss Ratio* 68.2% 65.0%
Net Expense Ratio 14.8% 12.9%
Adjusted Combined Ratio* 83.0% 77.9%
2007 Preliminary Results
* Adjusted to exclude impact of change in claims reserving policy
1111
2007
€000s
2006
€000s
%
Adjusted Underwriting Result 59,339 76,542 -22.5%
Longer term investment return 53,369 48,054 +11.1%
Non underwriting operating income 15,175 33,919 -55.3%
Adjusted Operating Profit* 127,883 158,515 -19.3%
Change in reserving policy 107,627 -
Operating Profit 235,510 158,515 +48.6%
Adjusted Operating Profit by activity*:
Insurance underwriting 112,708 124,596
Non-underwriting
Leisure & Leisure Property Development
16,101 10,092
- Financial services/other 5,882 4,279
- Capital fund (6,808)
15,175 19,548 33,919
127,883 158,515
2007 Preliminary Results
Income Statement (contd)
* Adjusted to exclude impact of change in claims reserving policy
1212
2007 2006
€000s €000s
Operating profit 235,510 158,515
Profit on sale of land at La Cala - 81,774
Short term fluctuation in investment return (69,253) 61,350
Finance costs (4,089) (4,859)
Profit before tax 162,168 296,780
Income tax expense (22,093) (49,948)
Profit for the year 140,075 246,832
Adjusted operating earnings per share* 316.33 376.60
Dividend per share 79.50 69.00
Income Statement (contd)
2007 Preliminary Results
*Adjusted to exclude impact of change in claims reserving policy
1313
Balance Sheet : Assets
31/12/07 31/12/06
Property & Equipment €000s €000s
Hotels/golf 192,352 180,369
Property – own use 32,806 33,195
Fixtures & Fittings 18,186 243,344 16,815 230,379
Investments
Property 83,019 81,181
Financial 823,151 1,099,309
Reinsurers’ share of technical provisions 50,483 72,553
Other receivables/DAC’s 85,705 99,319
Other Assets
Development land 30,781 32,608
Work-in-Progress 34,964 33,825
Cash 35,618 101,363 37,423 103,856
Total Assets 1,387,065 1,686,597
2007 Preliminary Results
1414
Balance Sheet : Equity & Liabilities31/12/07 31/12/06
Equity
€000s €000s
Share Capital 21,277 21,277
Reserves 362,312 476,242
Shareholders’ funds – equity interests 383,589 497,519
Preference Share Capital 2,923 2,923
Minority Interests 5,689 6,476
Total equity 392,201 506,918
Liabilities
Technical provisions
- Unearned premiums 199,074 197,507
- Claims 612,852 811,926 734,439 931,946
Deferred tax 27,738 33,227
Creditors
- Loans 60,406 112,350
- Other 94,794 155,200 102,156 214,506
Total Liabilities 1,387,065 1,686,597
2007 Preliminary Results
1515
Statement of Changes in Equity
31/12/07
€000s
31/12/06 €000s
Balance at 1st January 506,918 485,473
Profit for the period 140,675 246,832
Return of capital (175,996) -
Special dividend – La Cala - (54,979)
Buyback of own shares (52,606) (129,213)
Dividends paid (25,430) (22,693)
Available-for-sale investments - (26,342)
Other (760) 7,840
Balance at 31st December 392,201 506,918
2007 Preliminary Results
1616
Cash Flow Statement
2007 €000s
2006
€000s
Net Cash from operating activities 121,263 180,509
From (used in) investing activities 179,790 (3,136)
Used in financing activities (303,085) (181,574)
Net decrease in cash and cash equivalents (2,032) (4,201)
Cash and cash equivalents at the beginning of the period 37,423 41,897
Effect of foreign exchange rate changes 227 (273)
Cash and cash equivalents at the end of the period 35,618 37,423
2007 Preliminary Results
1717
Return on Equity
2003 2004 2005 2006 2007
Underwriting 50.75% 43.78% 53.08% 58.44% 49.46%
Non underwriting 13.68% 8.63% 11.63% 39.75% 2.89%
Total 35.09% 31.61% 36.53% 50.61% 31.69%
2007 Preliminary Results
1818
Gross Claims Run-Off
Estimate of cumulative claims:
Prior
Years
€m
2001
€m
2002
€m
2003
€m
2004
€m
2005
€m
2006
€m
2007
€m
Total
Claims
Outstanding
€m
At end of underwriting year - 205 270 262 329 329 394 341
One year later - 201 222 225 278 278 306
Two years later - 198 209 206 256 243 -
Three years later - 182 198 185 224 - -
Four years later - 168 174 166 - - -
Five years later - 163 165 - - - -
Six Years later - 158 - - - - - -
Estimate of cumulative claims 1,142 158 165 166 224 243 306 341 2,745
Cumulative payments (1,112) (137) (145) (124) (157) (142) (183) (132) (2,132)
Claims outstanding 30 21 20 42 67 101 123 209 613
2007 Preliminary Results
1919
Market Shares Gross Written Premium – 2007 (Provisional)
11.3
0%
5.0%
10.4%
5.0%
11.1%12.8%14.1%
13.3%14.9%
5.7%
12.4%
4.8%
7.8%
10.3%
10.7%
11.6%
12.0%
20.7%
9.7%
8.8%
12.3%
10.2%
13.2%
10.7%
21.1%
9.3%
8.7%
7.1%
9.0%
21.8%
8.7%
6.4%
11.7%
21.7%
8.7%9.4%
8.2%
Others(14)AIGEagle StarR.S.A.AXAFBDAllianzQuinnHibernian
200720062005200420032002
Total Market 2007 -€3,604m: 2006 - €3,822m: 2005 - €3,841m: 2004 - €3,933m : 2003 - €4,239m: 2002 - €3,955mFBD Premium 2007 - €408m: 2006 - €407m: 2005 - €389m: 2004 - €351m: 2003 - €369m: 2002 - €326m
2007 Preliminary Results
2020
Outlook : Underwriting 2007 Preliminary Results
Premiums - Market• Price reductions have continued into 2008• “Hardening of premiums expected in coming months”… (major Irish
Insurer)• Combined ratios being reported signal inevitability of price increases
Q: How soon?• Claims Environment
• Scope for further incremental improvement (Road Safety: Speed cameras / enforcement)
Premiums - FBD• Range of single digit price increases implemented in January 2008• Year to date -
• Marginal growth in Policy Count• Premium income in line with 2007
• Year ahead Market should harden… volumes up, premium income up FBD well positioned to take advantage of impending price increases
21
Outlook : Underwriting (contd)
Claims• Year to date
Incidence levels similar to 2007• Year ahead
Budgeting for year to date experience to continue Average claim costs to rise in line with inflation
No-Nonsense Car Insurance• Brand building underway
Strategic Initiatives• E-commerce developments• Metro markets• New Products
Business Support Centre• Continuing to enhance capacity
2007 Preliminary Results
22
Outlook : Non-Underwriting
Leisure and Leisure Property Development• Challenging Marketing Conditions
Innovative Marketing / Cross Selling Cost Management
La Cala Land Sale (Tranche II)• Planning expected in 2009
Financial Services• Scope / plans to grow in new markets
2007 Preliminary Results
23
Outlook : Corporate
Capital• Ongoing efficient capital management
• €94m distribution (re: claims reserves) scheduled for mid year
• Repatriations since March 2005 - €496m (excluding ordinary dividends)
• Ordinary Dividend / Earnings Payout continue to grow
2007 Preliminary Results