REG - Sabre Insurance Grp - Trading Update

Sabre InsuranceAnnouncement

25/05/2023 07:00

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RNS Number : 5737A  Sabre Insurance Group PLC  25 May 2023

 25 May 2023
 Sabre Insurance Group plc

 Trading Update

 Full year guidance reiterated

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 January 2023 to 30 April 2023 ahead of its Annual General
 Meeting ("AGM") later this morning.

                  Unaudited       Unaudited
                   4months ended  4 months ended
                                      30 Apr 2023    30 Apr 2022
 Gross written premium - Motor       £47.9m          £45.3m
 Gross written premium - Motorcycle  £6.3m           £12.0m
 Gross written premium - Taxi        £4.7m           £2.5m((1))
 Gross written premium - Total       £58.9m          £59.8m

(1) = Disclosed as part of 'Motor' in the May 2022 trading update

 Business highlights for the first four months of 2023

 ‒    Gross written premium in Motor has increased year on year, with
 profitability in line with expectations and ahead of the same period last year

 ‒    Further progress in improving the profitability of the Motorcycle
 business with the current run-rate performance in-line with expectations and
 anticipated to deliver a positive contribution to profit in 2023

 ‒    Underwriting actions to improve the profitability of the Taxi
 business are anticipated to continue through 2023, reflected in current
 reduced premium run-rate of this business

 ‒    Ongoing focus on profitability, not volume, with total policy count
 of 275k as at 30 April 2023 (31 December 2022: 304k) including 54k motorcycle
 policies (31 December 2022: 74k) and 14k taxi policies (31 December 2022: 12k)

 ‒    Whilst core Motor policy count declined early in the year, we have
 seen a return to growth in policy count in recent weeks

 ‒    Post-dividend solvency capital ratio at 31 March 2023 of 172% (31
 March 2022: 160%)

 Market trends

 ‒    Claims inflation for 2023 anticipated to remain at c.10%, as
 previously guided

 ‒    Evidence of positive momentum in market pricing since late March,
 with this trend anticipated to continue in the coming months

 Full year guidance reiterated

 ‒    High single-digit growth in overall gross written premium
 anticipated for the full year

 ‒    Low double-digit growth in core Motor business gross written premium
 somewhat offset by a reduction in the Motorcycle and Taxi businesses as
 underwriting actions take hold

 ‒    Combined operating ratio expected to be between 85% to 90%

 ‒    Expected expense ratio strain in H1, and improvements on loss ratios
 throughout 2023 as pricing actions earn through, means H1 combined operating
 ratio likely to be higher than the expected 2023 full year position

 ‒    Note that this guidance is carried forward from year-end on an
 IFRS4-equivalent basis

 Geoff Carter, Chief Executive Officer of Sabre, commented:

 "I am pleased to be able to continue my message of cautious optimism from our
 full-year results into our first update for 2023, and indeed I am feeling
 slightly more optimistic given strong volumes in recent weeks.

 In particular, we have been encouraged by the trends that we have been seeing
 from mid-March and into May.  There is clear evidence that market pricing is
 improving, and we have seen weekly gross written premiums across this period
 in our core Motor business over 20% higher than the same time last year. We
 anticipate this trend of improving market pricing will continue, albeit it is
 too early to tell what the pace and trajectory of improvement will be, and are
 confident in our ability to continue to grow volumes at the appropriate
 margin. We are currently in the fortunate position of making pricing decisions
 designed to find an optimal point between volume growth and margin
 enhancement.

 We expect the loss ratios in the core Motor business to improve through the
 rest of 2023, with pricing actions reflecting ongoing inflation. Volumes for
 the Taxi business have been suppressed while this market segment remains
 challenging. The actions we took last year and this year to increase the
 profitability of the Motorcycle businesses should generate a positive
 contribution to profit.

 If these positive market pricing trends and run-rates continue through the
 rest of the year, we anticipate a strong bounce-back in earnings compared to
 2022."

Investor enquiries                   01306 747 272
 Sabre Insurance Group plc

 Geoff Carter / Adam Westwood

 Media enquiries                      020 7353 4200
 Teneo                                sabre@teneo.com
 James Macey White / Eleanor Pomeroy

 

 LEI Code: 2138006RXRQ8P8VKGV98

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 January 2023 to 30 April 2023 ahead of its Annual General
Meeting ("AGM") later this morning.

                                     Unaudited       Unaudited
                                     4 months ended  4 months ended
                                      30 Apr 2023    30 Apr 2022
 Gross written premium - Motor       £47.9m          £45.3m
 Gross written premium - Motorcycle  £6.3m           £12.0m
 Gross written premium - Taxi        £4.7m           £2.5m((1))
 Gross written premium - Total       £58.9m          £59.8m

(1) = Disclosed as part of 'Motor' in the May 2022 trading update

Business highlights for the first four months of 2023

‒    Gross written premium in Motor has increased year on year, with
profitability in line with expectations and ahead of the same period last year

‒    Further progress in improving the profitability of the Motorcycle
business with the current run-rate performance in-line with expectations and
anticipated to deliver a positive contribution to profit in 2023

‒    Underwriting actions to improve the profitability of the Taxi
business are anticipated to continue through 2023, reflected in current
reduced premium run-rate of this business

‒    Ongoing focus on profitability, not volume, with total policy count
of 275k as at 30 April 2023 (31 December 2022: 304k) including 54k motorcycle
policies (31 December 2022: 74k) and 14k taxi policies (31 December 2022: 12k)

‒    Whilst core Motor policy count declined early in the year, we have
seen a return to growth in policy count in recent weeks

‒    Post-dividend solvency capital ratio at 31 March 2023 of 172% (31
March 2022: 160%)

Market trends

‒    Claims inflation for 2023 anticipated to remain at c.10%, as
previously guided

‒    Evidence of positive momentum in market pricing since late March,
with this trend anticipated to continue in the coming months

Full year guidance reiterated

‒    High single-digit growth in overall gross written premium
anticipated for the full year

‒    Low double-digit growth in core Motor business gross written premium
somewhat offset by a reduction in the Motorcycle and Taxi businesses as
underwriting actions take hold

‒    Combined operating ratio expected to be between 85% to 90%

‒    Expected expense ratio strain in H1, and improvements on loss ratios
throughout 2023 as pricing actions earn through, means H1 combined operating
ratio likely to be higher than the expected 2023 full year position

‒    Note that this guidance is carried forward from year-end on an
IFRS4-equivalent basis

Geoff Carter, Chief Executive Officer of Sabre, commented:

"I am pleased to be able to continue my message of cautious optimism from our
full-year results into our first update for 2023, and indeed I am feeling
slightly more optimistic given strong volumes in recent weeks.

In particular, we have been encouraged by the trends that we have been seeing
from mid-March and into May.  There is clear evidence that market pricing is
improving, and we have seen weekly gross written premiums across this period
in our core Motor business over 20% higher than the same time last year. We
anticipate this trend of improving market pricing will continue, albeit it is
too early to tell what the pace and trajectory of improvement will be, and are
confident in our ability to continue to grow volumes at the appropriate
margin. We are currently in the fortunate position of making pricing decisions
designed to find an optimal point between volume growth and margin
enhancement.

We expect the loss ratios in the core Motor business to improve through the
rest of 2023, with pricing actions reflecting ongoing inflation. Volumes for
the Taxi business have been suppressed while this market segment remains
challenging. The actions we took last year and this year to increase the
profitability of the Motorcycle businesses should generate a positive
contribution to profit.

If these positive market pricing trends and run-rates continue through the
rest of the year, we anticipate a strong bounce-back in earnings compared to
2022."

 

 Investor enquiries                   01306 747 272
 Sabre Insurance Group plc

 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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