Sabre Insurance Group plc, a leading motor insurance underwriter in the UK, has released its unaudited financial results for the first half of 2024, ending on June 30.
Sabre's gross written premium reached £125.7 million, up from £99.5 million in the same period last year and £225.1 million for the full year 2023. The net loss ratio improved to 57.3%, compared to 62.0% in June 2023 and 56.3% at the end of December 2023.
The expense ratio stood at 26.3%, down from 31.8% the previous year, contributing to a combined operating ratio of 83.6%, a decrease from 93.8% in 2023.
The company's net profit margin increased to 18.0%, significantly higher than the 8.3% reported in June 2023. Profit before tax rose to £20.2 million from £4.8 million, while profit after tax climbed to £15.1 million, up from £3.8 million.
The interim dividend per share was set at 1.7p, compared to 0.9p in the previous year. The solvency coverage ratio before interim and final dividends was 191.9%, slightly lower than the 205.3% recorded at the end of 2023.
Sabre noted that its core motor vehicle segment has balanced volume and profitability, adhering to its strategy where profitability is the target, and volume is the outcome. The motorcycle and taxi portfolios also continue to show strong development, complementing the core portfolio with solid underlying profitability.
The company also said that it maintains a robust solvency position, attributed to its strong underwriting performance and capital generation.
The market has seen a slowdown in price increases following significant corrections in 2023. Claims inflation remains high in 2024 and is expected to persist into 2025, necessitating further market-wide rate increases. Sabre said that it has maintained a cautious approach to pricing and reserving, ensuring that price changes cover claims inflation.
In response to the new government's emphasis on competitive and transparent pricing, Sabre has highlighted its consistent target margin approach and limited reliance on ancillary product income. The company believes the UK motor insurance market provides value through transparency, competition, and product variety, reflecting the underlying cost of claims.
Sabre has progressed in several strategic initiatives, including implementing “insurer hosted pricing” to enhance pricing capabilities and expanding Motorcycle distribution planned for early 2025. The company is also working on improving the efficiency of its direct operations.
The company reaffirms its full-year guidance, expecting further growth in the core Motor Vehicle account and overall growth in gross written premiums above claims inflation. The overall combined operating ratio is projected to be between 75% and 80% on an IFRS 17 (discounted) basis, depending on the level of discounting credit for the year. Forward-looking claims inflation remains around 10%.
Read More: Sabre Insurance posts full year 2023 results
Geoff Carter (pictured above), CEO of Sabre, noted that the company is in a strong position mid-year, having achieved good premium levels at target margins across all products.
“This is clearly demonstrated by the positive numbers we are reporting today. We have been able to deploy price increases which reflect our view of claims inflation, and we look forward to a strong performance in the second-half of the year as the premium we have written to date earns-through,” Carter said.
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