Investors are raising a glass to insurer FBD (FBH) as it posts significantly reduced pre-tax losses, down from €96.4 million to €3.7 million, in the six months to 30 June.

The company expects to become profitable in 2017.

Its shares are up 9.1% to €6.58.

FBH says its premiums declined by €4 million to €180 million year-on-year, driven by a reduction in the broker business.

Revenue has dropped from €203.9 million to €198.2 million.

It also reports higher premiums from direct operations of €6.3 million, which was offset by a 47% decline in business written through brokers.

Specific types of insurance have increased year-or-year with motor insurance up 18.7% after FBD started to raise rates two years ago.

Increases across of its classes of business are up 27% since 2014.

The insurer notes that Brexit may have negative effects for businesses in Ireland, but reassured investors that it will not be directly affected in the near term by currency trends.

Chief executive Fiona Muldoon says: ‘We believe that structural reforms are necessary to tackle injury claims inflation and address the impact claims costs are having on the affordability for farmers, businesses and other consumers.

‘The re-pricing of certain risk classes will need to continue for a further period to allow FBD to fully restore profitability for its shareholders.’

FBD’s combined operating ratio , a measure of underwriting profitability, is 101%. This indicates it pays out more in claims than it receives in premiums and led to an underwriting loss of €1.6 million.

Issue Date: 12 Aug 2016