FBD is confident of not having to pay out any further Covid disruption insurance cover on existing business policies beyond what it has already agreed with around 1,100 publicans.
FBD chief executive Tomás O’Midheach said it is the insurer’s belief that it has no further liabilities for Covid disruption to existing policyholders.
Earlier this month, the High Court ruled that FBD must pay out cover to four publicans who took a landmark test case against the insurer for Covid-related business interruption compensation.
That ruling opened the door for payments to 1,100 publicans who had the same policy.
FBD has already started paying interim payments to those policyholders.
The High Court has now ruled that the exact amount FBD must pay out to the pubs for Covid disruption will be decided upon after April.
Mr O’Midheach was speaking after FBD estimated overall gross costs from that test case to be €150m. After payouts, re-insurance and other costs, FBD said the estimated net hit it is likely taking from the business interruption case should be about €65m.
That is up from a previous estimate of €30m.
Mr O’Midheach said FBD will endeavour to settle the valid publican claims “as quickly as possible”.
The Covid-related business interruption provision and a lower frequency of claims heavily eroded FBD’s 2019 profit of €112.5m and saw it make a profit of just €4.8m in 2020.
However, that was seen as being a better-than-expected result and Mr O’Midheach called it a “resilient” performance.
“All businesses faced extraordinary challenges in 2020 and, as we navigate towards a new normal, we can reflect on a resilient performance over a uniquely challenging year for FBD,” he said.
He said FBD has suffered no reputational damage from the recent Covid insurance test case, with customer renewal rates amongst its publican clientele currently running at around 90%.
While FBD is confident of having drawn a line under the Covid disruption issue, more than 420 restaurants, hotels and bars are set to proceed with legal action against a number of insurers – including it – in the coming weeks over the same issue.
FBD is one of 10 insurance firms having been written to by the Restaurants Association of Ireland, on behalf of its members.
Mr O’Midheach also said FBD remains prepared to pay all “reasonable” legal costs relating to the recent test case.
There is a significant dispute over the legal costs aspect of the case, with FBD seemingly only willing to pay party-to-party costs, which arise from the opposing legal teams dealing with each other.
FBD said it is not proposing any shareholder dividend, saying capital preservation is paramount given the ongoing economic uncertainty.
Its shares rose by more than 3% on the back of its latest results.