Sabre Insurance Group PLC Trading Update (5905Q)
October 19 2023 - 1:00AM
UK Regulatory
TIDMSBRE
RNS Number : 5905Q
Sabre Insurance Group PLC
19 October 2023
19 October 2023
Sabre Insurance Group plc
Trading Update
Strong premium growth and healthy capital position
Sabre Insurance Group plc (the "Group" or "Sabre"), one of the UK's
leading motor insurance underwriters, today provides an update on
trading for the period from 1 July 2023 to 30 September 2023.
Financial highlights Nine months ended Year ended
30 September 31 December
------------------------------------ ---------------------- --------- -------------
2023 2022 % change 2022
------------------------------------ ---------- ---------- --------- -------------
Gross written premium GBP162.2m GBP135.7m 19.5% GBP171.3m
Gross written premium - Motor GBP140.5m GBP105.2m 33.6% GBP134.9m
Vehicle
Gross written premium - Motorcycle GBP10.7m GBP20.9m (48.8%) GBP23.1m
Gross written premium - Taxi GBP11.0m GBP9.6m 14.6% GBP13.3m
Post-dividend solvency capital
ratio 191% 163% 154%
------------------------------------ ---------- ---------- --------- -------------
Business highlights for the first nine months of 2023
* Strong performance from our core Motor Vehicle book
* Gross written premiums ('GWP') up 34% year-to-date
and up 61% versus Q3 2022
* In recent weeks, premium run-rate has been over 80%
up year-on-year
* Increase in policy count, while maintaining continued
focus on profitability as a target and volume as an
output. Core Motor Vehicle policy count 222k at 30
September 2023 (30 June 2023: 211k)
* Significant rate increases mitigating the impact of
claims inflation and ensuring margins return towards
historical levels for business written in recent
months
* Increase in solvency capital ratio reflects return
towards historical levels of underwriting
profitability on core Motor Vehicle business and
profitable growth
* Good performance from Motorcycle book
* Ongoing focus on margin over volume - with rate
increases expected to drive improved loss ratio
performance for 2023 vs 2022
* Policy count and premium growth impacted by the
cessation of trading with MCE Insurance, offset by
increase in sales through our alternate channel.
Motorcycle policy count 45k at 30 September 2023 (30
June 2023: 48k)
* Taxi book performance improving as planned
* Taxi market remains challenging, significant
underwriting actions starting to show improved loss
ratio performance but have reduced premium run-rate
vs 2022. Taxi policy count 13k at 30 September 2023
(30 June 2023: 14k)
* Underwriting performance across the portfolio in Q3
supports expectation of an improvement in the
combined operating ratio for H2 vs H1 2023. Expect
combined operating ratio for 2023 at the higher end
of 85% - 90% on a discounted basis in-line with
previous guidance
* Post-dividend solvency capital ratio as at 30
September 2023 of 191 % (30 September 2022: 163%)
* Expect to have sufficient capital to allow the Board
flexibility in determining an appropriate dividend
distribution at year-end in-line with our policy - an
ordinary dividend payout ratio of 70% of adjusted
profit after tax and a distribution of surplus
capital through special dividends
Market trends
* Growth in our GWP and policy count despite price
increases suggests market pricing correction has
continued through Q3, with Sabre continuing to see
the benefits of acting early with respect to pricing
* Claims inflation for 2023 continues at around 10%,
however rate increases applied are sufficient to
cover slightly higher levels of inflation and improve
loss ratios towards historical norms, from which we
expect to see the benefit in 2024
Full-year premium guidance raised; profitability reaffirmed
* Premium in recent months has been above expectations,
therefore we increase our overall 2023 full-year
gross written premium year-on-year growth expectation
to 20% - 25%
* Reiterate profitability guidance provided at
half-year, expect discounted combined operating ratio
for the full-year 2023 at the upper end of the 85% -
90% range
* Premium growth and momentum in underwriting margin
improvements will earn through in 2024, which we
expect to result in further improvement in combined
operating ratio in-line with previous guidance
Geoff Carter, Chief Executive Officer of Sabre, commented:
" Having stuck firmly to our 'profitability over volume' strategy
through four-years of persistent market under-pricing and periods
of very high inflation, we are now starting to show the benefits
of our strategy as market pricing continues to correct.
We have been able to increase prices at a level to cover high on-going
inflation whilst also returning anticipated profitability on written
business towards our historical levels - in recent months core Motor
Vehicle business has been written at an assessed sub-80% undiscounted
combined operating ratio - which we have achieved at the same time
as writing total GWP considerably higher than our expectations. This
should contribute to continued improvement in the financial-year
combined operating ratio for 2024, as business written in recent
months starts to earn through and the impact of Taxi business written
earlier in 2023 subsides.
It is also pleasing to see Motorcycle now performing at around the
required level and Taxi performance improving as planned.
Our success so far this year is evident in the high premium levels
and very strong solvency position which will allow sufficient headroom
for further growth whilst allowing the Board flexibility in determining
an appropriate dividend distribution at year-end in-line with our
policy.
I would like to thank all our people and shareholders, who have
supported Sabre through an extended and challenging market, as we
look to a bright and exciting future." Investor enquiries 01306 747 272
Sabre Insurance Group pl investor.relations@sabre.co.uk
c
Geoff Carter / Adam Westwood
Media enquiries 020 7353 4200
Teneo sabre@teneo.com
James Macey White / Eleanor
Pomeroy
LEI Code: 2138006RXRQ8P8VKGV98
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