“Throughout a period of significant change in the UK motor insurance sector, we have continued to apply our long-term strategy, to focus on underwriting profitability, with premium volume remaining an output rather than a target.”
Those were the words of chief executive Geoff Carter when Sabre Insurance Group Plc released its interim results for the first nine months of 2019. The UK private motor insurance underwriter reported lower gross written premium (GWP), which it noted was anticipated.
From £162.6 million in the same nine-month period last year, the amount fell to £152.9 million this time around. Full-year GWP, meanwhile, is expected to be approximately 7% lower than 2018’s £210 million.
Sabre, however, believes there is potential for an attractive full-year dividend, thanks to strong organic capital generation. The insurer added that it has successfully mitigated the rise in claims inflation and other cost pressures through disciplined underwriting and well-controlled claims management.
Lifting the lid on emerging cost pressures, Carter said “these include increases in the MIB (Motor Insurers’ Bureau) and FSCS (Financial Services Compensation Scheme) levies, potential reinsurance price rises following the Ogden rate decision, and possible changes in claims management company behaviour following the implementation of the forthcoming personal injury legal reforms.”
The CEO stated further: “Encouragingly, early signs of market premium increases or other competitor actions mean that while we have accelerated price increases to cover these emerging costs as well as ongoing inflation, our volumes are not being further negatively impacted.
“We note the recent FCA report on pricing in the insurance industry. Given Sabre’s approach is to price policies on a consistent basis across our new and renewal portfolios, we do not anticipate that the proposed remedies will have a detrimental impact on our business.”
According to Carter, Sabre’s 2019 performance so far has been in line with expectations and they remain confident in delivering a slightly better combined ratio than the company’s long-term target. He also pointed to their current solvency ratio of 198%, which was described as “well above” the 140-160% target range.
