FBD Insurance is forecast to report a pre-tax loss of €11m when it announces its full-year results for 2020 on Friday.
In a research note published this week, Goodbody analyst Eamonn Hughes said he expects FBD to record pre-tax losses of €11m for 2020 as a result of the recent High Court ruling on business interruption insurance.
FBD has already set aside €30m to cover the potential cost of the High Court ruling but Goodbody is now forecasting that the total cost will be closer to €70m, which would mean FBD will need to set aside another €40m.
As a result, Hughes said he does not expect FBD to pay a shareholder dividend for 2020 and said he will be watching closely to see what FBD decides to do with its 2019 dividend.
Farmer shareholders in FBD will also be watching closely to see what the insurer decided to do with its 2019 dividend. The insurer announced a 2019 dividend of €1 per share this time last year before the COVID-19 virus hit Ireland.
In the months that followed, FBD decided to delay paying out this dividend given the uncertainty. However, the insurer hinted it could pay out the dividend in 2021.
FBD’s annual dividend is an important income stream for a number of farmer organisations. Farmer Business Developments, the largest shareholder in FBD, is due to receive more than €8.5m of the 2019 dividend, while FBD Trust would receive €3m and the IFA would receive in the region of €0.5m.