In this latest round of insurance earnings reports, most insurers have fared well despite the doom and gloom of low interest rates and the Brexit vote. However, few have issued results quite as eye-catching as those from Hastings Group Holdings Plc, released earlier today.
The insurer reported significantly rising revenue and a reduction in costs. Gross written premiums climbed to £769 million, up from £614.9 million, a rise of 25%; with net revenue jumping from £481 million to £590.3 million.
The company has taken into account the Ogden rate change – it reported a sustained increase in adjusted operating profit, up 21% to £152.1m before the impact of the Ogden rate change, or 5% to £132.1m (2015: £126.1m), after allowing for the £20.0m impact of the change.
Speaking on the announcement of the results, Gary Hoffman, chief executive officer at Hastings, noted that the firm’s digital capabilities had driven its success.
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“The world is now digitally led and we’ve created a model that is built to take advantage of this shift throughout the entire customer journey, whether that’s through the price comparison website distribution of our products (which account for around 90% of our new business sales), our innovative use of data or through our advanced risk selection and fraud detection capabilities,” he said. “Every element of our business is optimised for a digital world.”
Hoffman is also confident that the firm will not be impacted by the Brexit fallout.
“Hastings is a general insurance provider writing only UK business so it’s very much business as usual for us,” he said.
“Whilst commentators expect some slowing of the UK economy, motor insurance is a compulsory purchase for motorists and it’s not cyclical. We may just see more customers shopping around. Our business model is well positioned to take advantage of this so we just need to continue to provide refreshingly straightforward products that are competitively priced. We also find that when economic growth slows, miles driven also decreases which is a positive for our claims experience.”
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