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Date: Wednesday 27 Aug 2008

LONDON (ShareCast) - Lower premiums and poor investment returns sent Irish underwriter FBD into the red in the first half of 2008, with the appalling weather in Ireland recently to hit the full year as well.

The insurer softened the downbeat statement with a special dividend of €1.50 despite interim losses of €5.2m, compared a profit of €49.7m. Operating earnings per share in the six months to June fell 33% to 105.43c.Gross written premiums fell to €198m from €205m.

Underwriting profits fell to €12.8m from €26.2m with the combined ratio climbing 92.6% from 85.1%.

"The reduction in operating profits is as a result of anticipated lower underwriting margins and a reduced longer-term investment return," chief executive Andrew Langford said.

The group added lower investment returns reflected ongoing volatility in equity markets, weak sterling and the slowdown in the UK's commercial property market.

On the underwriting side, FBD added it hoped premiums would "harden in the near future".

The interim dividend rises by 10% to 30.25c and will be paid in addition to the special dividend.

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