FBD Falls Most in Five Years as Forecast Is Reduced

FBD Holdings Plc (FBD) fell the most in more than five years after the Irish insurer cut its full-year earnings forecast amid a rise in motor claims and increased estimates of bad-weather costs during the winter.

FBD dropped as much as 8.8 percent, the most since March 2009, in Dublin trading and was down 7.3 percent at 15.24 euros at 10:30 a.m., giving the company a market value of 526 million euros ($715 million).

The company cut its 2014 operating earnings forecast to between 70 cents and 80 cents a share from 1.20 euros to 1.30 euros, which it had affirmed seven weeks ago. FBD estimates that increased motor and weather-related claims will cost it 16 million euros this year, the company said in a statement today.

“FBD’s claims-driven warning is very disappointing on the back of a solid end-April interim management statement,” Emer Lang, an analyst with Dublin-based Davy, who rates the stock outperform, wrote in a note to clients. She said she plans to cut her 124.8-cent full-year EPS estimate for the company by about 50 cents.

FBD, which is almost 25 percent owned by Farmer Business Developments Plc, a holding company belonging to Irish farmers, said it will continue to monitor claims “to ensure that risks are adequately priced and take further action if necessary.”

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editors responsible for this story: Dara Doyle at ddoyle1@bloomberg.net Steve Bailey, Keith Campbell

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