FBD Holdings plc

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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.


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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


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



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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………


77


Investments • Reduction in equity exposure• Restructuring of bond portfolio to reduce volatility


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


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2007 Highlights : Corporate Capital Management

Distribution of €177m of reserves (June 2007) Share buybacks of €53m Continued Ordinary Dividend Growth


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%


* 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


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)


*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


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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


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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


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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


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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%


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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


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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


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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

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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


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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


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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


FBD Holdings plc

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