fbd holdings plc

1

FBD Holdings plc

2008 Preliminary Results

March 2009

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.


33

2008 Highlights

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


FBD will benefit from positive operating leverage as prices rise

4

Continuing Growth in Market Share

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

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

Growing market share, profitably


Premium Income FBD v Irish Market

3,0003,2003,4003,6003,8004,0004,2004,400

2002 2003 2004 2005 2006 2007 2008

Year

250

350

450

Irish Market

FBD

Premium by Category - 2008

14%

20%

19%21%

26%

HOUSES COMMERCIAL OTHER FARMS AGRI

OTHER MOTOR CARS

55

Market Shares Gross Written Premium – 2008 Provisional

11.6

0%

11.9

0%

5.20

%

8%

10%10.4

0%

11.2

0%

11.3

0%

12.2

0%

19.9

0%

5.0%

10.4%

5.0%

12.8%

11.1%

8.7%

11.7%

8.2%

5.7%

10.3%

20.7%

12.0%

10.7%

11.6%

9.7%

7.8%

4.8%

12.4%

8.7%

9.3%

21.1%

12.3%

8.8% 10.2%

10.7%

13.2%

14.1%

21.8%

9.0%

7.1%

14.9%

9.4%

8.7%

21.7%

13.3%

6.4%

Others(14)AIGEagle StarAXAR.S.A.AllianzFBDQuinnHibernian

2008200720062005200420032002

Total Market 2008 -€3,333m: 2007 -€3,604m: 2006 - €3,822m: 2005 - €3,841m: 2004 - €3,933m : 2003 - €4,239m: 2002 - €3,955mFBD Premium 2008- €386m: 2007 - €408m: 2006 - €407m: 2005 - €389m: 2004 - €351m: 2003 - €369m: 2002 - €326m


6

Premium PricingSource: Dept of Env, Heritage + Local Goc, IIF + INCA Ireland

€400

€500

€600

€700

€800

€900

€1,000

€1,100

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Gross Written Premium per Vehicle

Graph: Irish Industry Private Motor Insurance Pricing YOY

-20

-15

-10

-5

0

5

10

% Ch

ange

YOY

Private Motor Vehicle

Graph: Irish Industry House Insurance Pricing YOY

-15

-10

-5

0

5

10

15

20

% Ch

ange

YOY

Home Policies

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

Claims Trends

Loss Ratio

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008

Year

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

Loss Ratio

FBD 2002 - 2008


8

Distribution Platform ChangingMotor Insurance

100%

27%40% 33%

0%

40%

80%

Sales Office Telephone SupportCentre

Internet

Distribution ChannelFeb-07 Feb-09

• 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


Sales Office Realignment

47

34

0

10

20

30

40

50

Current Proposed

99

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


Solid result in difficult trading conditions

Protecting Competitiveness Cost Savings Special offers Developing new markets Access to FBD database

1010

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

Well placed financially for growth

Underwriting Asset Allocation

46%

20%

7%

5%

2%

4%16%

Gilts

Cash

Loans

Property

Land & Buildings

Equities

Other

11

Income Statement 2008

€000s

2007

€000s

Gross written premiums 385,638 407,953

Net earned premiums 343,075 350,321

Net claims incurred (271,205) (239,054)

Net operating expenses (58,470) (51,928)

Adjusted Underwriting Result 13,400 59,339

Loss Ratio 79.1% 68.2%

Net Expense Ratio 17.0% 14.8%

Combined Ratio 96.1% 83.1%

Gross Written Premium

€300,000

€320,000

€340,000

€360,000

€380,000

€400,000

€420,000

2002 2003 2004 2005 2006 2007 2008

Year

€0

00

s

Positive operating leverage as prices rise


0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

2007 2008

Underwriting Net Expense Ratio

Net Expense Ratio

5.0%

9.0%

13.0%

17.0%

21.0%

25.0%

29.0%

2002 2003 2004 2005 2006 2007 2008

Year

FBD

Market

1212

2008

€000s

2007

€000s

Underwriting Result 13,400

59,339

Longer term investment return 43,930

53,369

Non underwriting operating income

8,453 15,175

Adjusted operating profit 65,783

127,883

Adjusted operating profit

by activity:

Insurance underwriting 57,330

112,708

Non-underwriting

- Property/leisure 5,991

16,101

- Financial services/other 3,329

5,882

- Capital fund (867) 8,453 (6,808) 15,175

65,783

127,883

Income Statement (contd)


Profitable at all points in the cycle

Adjusted Operating Profit

€0

€50,000

€100,000

€150,000

€200,000

2002 2003 2004 2005 2006 2007 2008

Year

€000

s

Operating Profit by Activity

87%

8% 5%

Insurance Underwriting

Property / Leisure

Financial Services/Other

1313

2008 2007

€000s €000s

Adjusted operating profit 65,783 127,883

Fluctuation in investment return (92,307) (69,253)

Restructuring costs (7,609) -

Change of reserving policy - 107,627

Finance costs (4,474) (4,089)

(Loss) profit before tax (38,607) 162,168

Income tax credit/(expense) 5,607 (22,093)

(Loss) profit for the year (33,000) 140,075

Income Statement (contd)


Valuation adjustments of €126.5m

Profit/ loss before tax

-€50,000

€50,000

€150,000

€250,000

€350,000

2002 2003 2004 2005 2006 2007 2008

Year

€000

s

Fluctuation in Investment Return

-100,000

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

80,000

2001 2002 2003 2004 2005 2006 2007 2008

Fluctuation inInvestmentReturn

1414

Underwriting Business – Asset Allocation

2008 2007

€m % €m %

German government gilts 466 45% 482 42%

Deposits and cash 207 20% 94 8%

Loans and accrued interest 71 7% 85 7%

Investment properties 53 5% 83 7%

Own land and buildings 24 2% 33 3%

Quoted equities and corporate bonds 38 4% 163 15%

Other 169 16% 210 18%

100%1,028 100% 1,150


Three times minimum statutory solvency requirements

1515

Group Assets – Valuation Adjustments2008 Preliminary Results

Properties independently valued by professional external valuers

At start

of year

€m

At end

of year

€m

Total Adjustments

€m %

German government gilts 482.2 466.3 - -

Hotel and golf resorts 192.4 167.0 (25.1) (13%)

Quoted equities and corporate bonds 181.6 38.0 (46.1) (25%)

Deposits and cash 108.6 218.8 - -

Loans and accrued interest 85.2 70.5 (15.7) (18%)

Investment properties 83.0 52.5 (30.5) (37%)

Inventories 65.7 62.4 - -

Insurance own land and buildings 32.8 24.3 (9.1) (28%)

Other 155.5 178.0 - -

Total 1,387.0 1,277.8 (126.5) (9%)

Adjustments made in income statement (92.3)

Adjustments made directly to reserves (34.2)

Total valuation adjustments (126.5)

16

Prior

Years 2001 2002 2003 2004 2005 2006 2007 2008 Total

€ms €ms €ms €ms €ms €ms €ms €ms €ms €ms

Estimate of cumulative claims:

At end of underwriting year - 205 290 262 329 330 394 340 384

One year later - 201 222 225 277 278 306 316

Two years later - 198 209 206 256 243 299 -

Three years later - 182 199 185 224 230 - -

Four years later - 168 174 166 215 - - -

Five years later - 163 166 157 - - - -

Six Years Later 158 158 - - - - -

Seven Years Later 156

Estimate of cumulative claims 1,135 156 158 157 215 230 299 316 384 3,050

Cumulative payments (1,114) (140) (146) (135) (173) (162) (208) (188) (159) (2,424)

Claims outstanding 21 15 13 21 43 68 92 128 225 626

2008 Run-off 8 3 7 9 8 13 7 24 - 80

Gross Claims Run-off2008 Preliminary Results

Validates Reserve Release in 2007

17

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

Dividend

79.5

40.25

0

20

40

60

80

100

2007 2008

Year

Cen

ts

Committed to progressive dividend policy

• Repatriations since 2005 of €546m• Special distribution of €1.50 in October 2008


Dividend Payout Ratio

0%

5%

10%

15%

20%

25%

30%

2003 2004 2005 2006 2007 2008

1818

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


FBD well positioned to benefit from hardening market

1919

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


Difficult environment, but focus on maintaining profitability

20

Proposition

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

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 ResultsQUESTIONS?

A.March 2009

2222

Balance Sheet - Assets31/12/08 31/12/07

Property & Equipment €000s €000s

Hotels/golf 167,088 192,352

Property – own use 24,335 32,806

Fixtures & Fittings 17,236 208,659 18,186 243,344

Investments

Property 52,538 83,019

Financial 768,420 823,151

Reinsurers’ share of technical provisions 58,994 50,483

Other receivables/DAC’s 91,092 85,705

Other Assets

Development land 30,806 30,781

Work-in-Progress 31,578 34,964

Cash 35,713 98,097 35,618 101,363

Total Assets 1,277,800 1,387,065


2323

Balance Sheet - Liabilities

Equity

31/12/08

€000s

31/12/07

€000s

Share Capital 21,409 21,277

Reserves 214,031 362,312

Shareholders’ funds – equity interests

235,410 383,589

Preference Shareholders 2,923 2,923

Minority Interests 4,151 5,689

Total equity 242,484 392,201

Liabilities

Technical provisions

- Unearned premiums 188,017

199,074

- Claims 626,188

814,205 612,852 811,926

Deferred tax 15,062 27,738

Creditors

- Loans 110,968

60,406

- Other 95,081 206,049 94,794 155,200

Total Liabilities 1,277,800 1,387,065


2424

Cash Flow Statement2008

€000s2007

€000s

Net cash from operating activities 26,315 121,263

From investing activities 1,949 179,790

Used in financing activities (27,099) (303,085)

Net increase (decrease) in cash and cash equivalents 1,165 (2,032)

Cash and cash equivalents at the beginning of the period 35,618 37,423

Effect of foreign exchange rate changes (1,070) 227

Cash and cash equivalents at the end of the period 35,713 35,618


fbd holdings plc

Documents

marketyearpremium income

preliminary resultsmarch

preliminary resultsfbd

irelandmarket share

growing market share

d average premium

sustainable growth

fbd holdings plc