FBD has announced it will not pay a dividend this year to its shareholders due to the uncertainty created by COVID-19 and the need to hold on to cash reserves. Prior to the pandemic outbreak, the insurer had announced it would pay a dividend of €1 per share, which equated to about €35m in total.

The cancellation of FBD’s dividend will impact some organisations. Farmer Business Developments, the largest shareholder in FBD with a 25% stake, was due to receive more than €8.5m in dividends. IFA also holds approx. 500,000 shares in FBD which would have seen €0.5m issued to the farm organisation.

Reserve

FBD also announced that it has set aside €22m in cash to cover the potential costs that it may incur as a result of a legal test case being taken by a number of publicans against FBD to solve a dispute over the insurer’s interpretation of its business interruption cover, which FBD believes does not cover loss of business due to the COVID-19 pandemic.

FBD has over 1,300 pub customers in Ireland meaning it has significant exposure should the test case ruling go against the insurer. FBD says it has so far received over 700 claims from businesses under its business interruption insurance cover.

Additionally, FBD said insurance premiums are down 3% up to the end of May as a result of the shutdown in the economy. The insurer said it had returned €7m in refunds to motorists due to the reduced car usage over recent months.

FBD said it also expects to return €7m to business customers whose need for employers liability, public liability and business interruption cover was reduced during the lockdown.