Operating profit achieved by the Group in the period amounted to €75.7m (H1 2005: €86.8m), somewhat ahead of target, due to a better out-turn in its primary underwriting business.

Total income amounted to €207.2m (H1 2005: €199.3m). It included net premiums earned of €173.2m (H1 2005: €164.5m) and investment income (calculated on the basis of longer term returns) of €23.8m (H1 2005: €21.8m), both of which arise in the Group's insurance underwriting business. The remaining €10.3m (H1 2005: €13.0m) represents the net income, i.e. after expenses, that arises in the Group's non-underwriting activities.

Expenses amounting to €131.5m (H1 2005: €112.5m) related to the Group's underwriting business. They consist of claim costs amounting to €108.5m (H1 2005: €91.7m) and operating expenses of €23.0m (H1 2005: €20.8m).

Gross written premiums (i.e. before reinsurance) amounted to €204.0m (H1 2005: €192.4m), an increase of 6% on the corresponding 2005 period. This increase is attributable to strong volume growth which more than offset the negative impact of premium reductions which had been implemented in the preceding 12 months.

The net claims incurred charge, which is comprised of the movement in net outstanding claims provisions of €13.8m (H1 2005: €13.6m) plus net claims paid of €94.7m (H1 2005: €78.1m) amounted to €108.6m (H1 2005: €91.7m). The increased claims charge, relative to first half 2005, reflects the increased exposure arising from growth in policy numbers, combined with what FBD term The claims charge, nonetheless, was within our budgeted range. Savings on prior year provisions had a considerable positive impact on the claims incurred charge, in keeping with recent accounting periods. We anticipate that for the year as a whole, such savings will be on a par with 2005.

Net operating expenses amounted to €23.0m (H1 2005: €20.8m). The additional investment in the business infrastructure (i.e. staff, training, technology, facilities and marketing) necessary to deliver our growth objectives, resulted in increased expenses, as anticipated.

When FBD announced in February 2006 that a conditional agreement had been entered into for a La Cala, Spain land sale, shareholders were advised of the Board's intention to distribute the net cash proceeds arising from the overall transaction. On foot of the proceeds received for the first tranche of land on 22nd June 2006, a special dividend of €1.60 per share was declared, amounting to €55m. This dividend was paid on 11th August 2006.

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