REG - Sabre Insurance Grp - Full-year results 2025
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RNS Number : 9450V Sabre Insurance Group PLC 10 March 2026
Full-year results 2025
Profit increased, strong underwriting performance, positive premium momentum
into 2026 and £5m share buyback
- Profit before tax up 4.9% year-on-year
- Net insurance margin improved to 19.2%, up 1.6ppts
- Total dividend in respect of 2025 at 13.5p - up 3.8% on 2024
- Share buyback of £5m proposed
- Positive premium momentum in Q4 continuing into 2026
- Delivery on track for our Ambition 2030 growth strategy
Sabre Insurance Group plc (the "Group", or "Sabre"), one of the UK's leading
motor insurance underwriters, reports its results for the year ended 31
December 2025.
SUMMARY OF RESULTS
Year to Year to Change
31 December 2025
31 December 2024
Gross written premium £202.9m £236.4m (14.2)%
Net insurance margin 19.2% 17.6% 1.6 ppts
Net loss ratio 54.1% 58.7% (4.6) ppts
Combined operating ratio 82.3% 84.2% (1.9) ppts
IFRS Profit before tax £51.0m £48.6m 4.9%
IFRS Profit after tax £37.9m £36.0m 5.3%
Total dividend per share 13.5p 13.0p 3.8%
Return on tangible equity (annualised) 37.2% 38.2% (1.0) ppts
Solvency coverage ratio (pre-final and special dividend) 198.7% 216.6% (17.9) ppts
Solvency coverage ratio (post-final and special dividend) 161.5% 171.1% (9.6) ppts
Solvency coverage ratio (post-dividend and share buyback*) 154.0% 163.1% (9.1) ppts
* = Share buyback subject to regulatory approval
Geoff Carter, Chief Executive Officer of Sabre, said:
"I am very pleased that Sabre has continued its track record of delivering
strong profits throughout the underwriting cycle, including the softer pricing
environment seen in 2025. With market pricing having lagged claims spend
trends for much of the year, we maintained our underwriting discipline,
executing robust cycle management and allowed volumes to reduce whilst
delivering a strong and improving margin through the period, leading to a 4.9%
increase in profit before tax.
The benefits of this strong discipline position us well for the future. Having
priced prudently for potential claims inflation throughout the period, we
benefitted from positive experience as inflation moderated in the latter part
of the year. This also allowed us to drive both premium and policy growth in
Q4 and into 2026 - in the first two months of 2026, Motor Vehicle gross
written premium is up over 5% year-on-year.
Alongside careful management of our existing business, we have progressed the
Ambition 2030 initiatives announced at our Capital Markets Event in December
2024. We remain confident in delivering our target of more than £80m of
profit before tax in 2030. A key milestone this year was the launch of Sabre
Direct in H1, our direct Motorcycle offering, which has been growing well
throughout the year. Later in 2025, we also began testing our differentiated
pricing models, which are key to supporting the growth of our core Motor
Vehicle business, with positive results to date.
Our Motor Vehicle business performed incredibly well during the year,
delivering an undiscounted net loss ratio of 50.5%, a 5.6ppts year-on-year
improvement reflecting the strength of our underwriting and claims management.
Motorcycle and Taxi performance improved in the second half, delivering
full-year undiscounted net loss ratios of 70.0% and 88.0% respectively, a
significant improvement on the half-year position. We have grown Motorcycle
premium by 9.3% year-on-year, while we have allowed Taxi premium to reduce by
27.4% as market conditions in that segment remain unattractive.
We continue to aim to pay a dividend in-line with growth in earnings during
the year, while maintaining our post-dividend solvency coverage ratio between
140% to 160%. Our strong performance in 2025 has allowed us to increase the
dividend per share for 2025 by 3.8% to 13.5p, including the interim dividend
of 3.4p already paid. At the same time, the Board has chosen to execute a
buyback of £5m (subject to regulatory approval) which follows the buyback
executed in 2025. This is indicative of the Board's confidence in the Group's
robust capital position and ability to continue to generate organic capital as
we look to grow through to our Ambition 2030 target.
Looking ahead to 2026 and beyond, I see a clear opportunity to grow both
profits and premium over the medium-term. We expect the Group to continue
premium growth in 2026, and to deliver a profit slightly ahead of 2025 as the
high-margin business written in 2025 earns through. I anticipate we will
continue to deliver sustainable profitable growth as we move towards 2030.
Iwould like to take this opportunity to thank all of Sabre's staff for their
continued hard work in delivering another excellent set of results this year."
FINANCIAL HIGHLIGHTS
- Profit before tax up by 4.9%
- Net insurance margin improved to 19.2%, comfortably within target range
- Gross written premium down 14.2% in-line with expectations given softer
market pricing and active cycle management
- Dividend increased to 13.5p per share - up 3.8% year-on-year
- Announcing the Group's second share buyback programme of £5m, subject to
regulatory approval
- Strong capital position, at 161.5% post-dividend, and 154.0% after
dividend and proposed share buyback, well within our target range of 140% to
160%
STRATEGIC HIGHLIGHTS
- Maintained underwriting discipline and responded appropriately to
reduction in claims inflation during the year
- Profits improved despite weak market conditions, demonstrating the
strength of Sabre's underwriting-focussed strategy
- Ambition 2030 initiatives on track
- Sabre Direct, our new direct, online-only Motorcycle product was launched
on schedule
- Testing of differentiated pricing in core Motor Vehicle product began in
late 2025
- Continue to book cautious inflation assumptions on most recent accident
year to reflect uncertainty in future inflationary risks
MARKET
- Market motor insurance premium prices reduced during 2025, stabilising
towards the end of the year
- Our view is that pricing has fallen behind cost and claims inflation, and
acorrection is required
- Claims inflation appears to have softened to mid-single-digits
- Having taken a cautious view of claims inflation, Sabre has been
well-placed to manage the pricing cycle through the end of 2025 and into 2026
- Closure of regulatory review into premium financing and UK Government
Taskforce covering motor insurance pricing considerably reduces regulatory
uncertainty
2026 OUTLOOK AND BEYOND
- Expect strong margins in 2026, within our target 18% to 22% range, as
well-priced policies written in 2025 and 2026 earn through
- Subject to market conditions, we expect to return to year-on-year growth
in Gross Written Premium.
- Motor Vehicle premium in Q1 to date is over 5% ahead of Q1 2025
- Ambition 2030 remains on track. In-line with our planned timetable,
testing will continue this year with some impact on 2026 as our initiatives
start to take effect and more significant impacts from 2027 onwards
ENQUIRIES
Sabre Insurance
Group
0330 024 4696
Geoff Carter, Chief Executive Officer
Adam Westwood, Chief Financial Officer
Teneo
020 72602700
James Macey White
Ffion Dash
ANALYST PRESENTATION
Event Title: Sabre Insurance - Full Year Results 2025
Time Zone: Dublin, Edinburgh, Lisbon, London
Start Time/Date: 09:30 Tuesday, March 10, 2026
Duration: 60 minutes
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This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014.
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Phone Type Phone Number
UK Local: +44 (0) 33 0551 0200 / Toll Free: 0808 109 0700
USA Local: +1 786 697 3501 / Toll Free: 866 580 3963
Password, if prompted Quote Sabre Insurance when prompted by the operator
Please join the event 5-10 minutes prior to scheduled start time. When
prompted, provide the confirmation code or event title.
A replay will be made available on the Sabre website following the conclusion
of the presentation.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014.
DIVIDEND TIMETABLE
Ex-dividend date: 23 April 2026
Record date: 24 April 2026
Payment date: 5 June 2026
FORWARD-LOOKING STATEMENTS DISCLAIMER
Cautionary statement
This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements may be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "will" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts and involve
predictions. Forward-looking statements may and often do differ materially
from actual results. Any forward-looking statements reflect Sabre's current
view with respect to future events and are subject to risks relating to future
events and other risks, uncertainties and assumptions relating to Sabre's
business, results of operations, financial position, prospects, growth or
strategies and the industry in which it operates.
Forward-looking statements speak only as of the date they are made and cannot
be relied upon as a guide to future performance. Save as required by law or
regulation, Sabre disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements in this
announcement that may occur due to any change in its expectations or to
reflect events or circumstances after the date of this announcement.
The Sabre Insurance Group plc LEI number is 2138006RXRQ8P8VKGV98.
Chief Executive Officer's Review
"Our profitability clearly demonstrates the benefit of our on-going commitment
to disciplined underwriting"
Geoff Carter
Chief Executive Officer
Healthy premium levels, increased profit and attractive capital returns
2025 was another strong year for Sabre. We delivered an increased profit from
a lower premium base and made significant progress with our Ambition 2030
initiatives.
Our profitability clearly demonstrates the benefit of our on-going commitment
to disciplined underwriting, treating profit as the target and volume an
output. We priced prudently for potential claims inflation on business written
in the year, despite soft market conditions, and benefitted from positive
experience as inflation moderated in the latter part of the year which allowed
us to drive growth in both premium and policy count in Q4 and into 2026.
The Headline numbers for 2025 are:
Gross written premium(1) IFRS profit before tax
£202.9m £51.0m
2024 | £236.4m 2024 | £48.6m
1 Alternative performance measure. For reconciliations to alternative
performance measures, see pages 212 to 216 of the 2026 Annual Report and
Accounts
Within this we delivered a very positive core motor loss ratio of 50.5%. We
have seen both Motorcycle and Taxi loss ratios improve in the second half of
the year and continue to expect these products to deliver useful additional
profit for the business. Our overall financial year loss ratio of 54.1% was a
4.6ppts improvement on 2024 and delivered a net insurance margin of 19.2%,
well inside our target range.
We have continued to ensure our prices fully cover our view of claims costs
and are calculated to deliver our target margins. In our view, claims
inflation moderated during the year and we believe it is now at a mid-single
digit level.
Reflections on 2025
In my 2024 Review, I outlined our hopes and expectations for 2025. These
included:
‒ We would deliver a strong financial result through our
differentiated and focused approach to pricing
‒ We would test the first stages of our Ambition 2030 plans
‒ We would expand our Motorcycle distribution
‒ We would demonstrate continued focus on customer
experience through development of a self-service portal
‒ Market rates would be competitive in H1, and increase in
H2 to protect margins across the market
‒ Premium levels would be partially impacted by market
pricing levels
I'm delighted that we delivered on the majority of these objectives. While
market pricing stabilised in H2, there were no signs of meaningful increases,
which is discussed further in the Market section.
Ambition 2030 plans - Test new pricing models
As hoped, we successfully conducted our initial pricing tests, gathering
valuable feedback that will allow us to begin the ramp-up of initiatives in
2026. Given that market pricing was generally not supportive of growth, the
increase in our in-force policy count in Q4 indicates that our refreshed
strategy allows us to grow profitably even in more challenging
market conditions.
Motorcycle
Our new direct product launched on schedule, attracting business almost
entirely through Price Comparison Websites. "Sabre Direct" was launched with a
restricted footprint in order to allow us to test and learn, and to amend
prices as we gathered more data. We are now confident in our pricing
proposition and will continue to expand our footprint through 2026.
We are also servicing all polices in-house rather than outsourcing. This is
supported through low fixed costs, with the product being entirely on-line,
with web-chat support and no call centre.
Customer Portal/Experience
We have continued to develop and refine our online portal and are benefitting
from an increasing volume of customers using this as their preferred servicing
model. This has supported positive customer experience as well as laying the
foundations to reduce direct product servicing costs over time.
Regulation
Our approach is to operate in-line with both the spirit and the letter of all
relevant regulation, with a continued focus on delivering good customer
outcomes.
We were pleased to see the conclusions of the Government Taskforce on
Insurance in late 2025. This concluded that the market functioned well and
that price increases were reflective of increased claims costs - which were
primarily driven by external factors. This has always been our view as
outlined in previous result announcements, and we hope this removes a cloud
over the industry.
We continue to believe we have low exposure to on-going areas of regulatory
focus, which appear to be primarily poor value ancillary products, high APR's
for premium finance and certain claims management activities.
Market
In our view the market is currently over-competing and risks undermining
margins. This is not something we will allow to happen at Sabre, and we remain
focussed on underwriting discipline.
As noted earlier, we believe claims inflation is returning to historical norms
of mid-single digit levels, whilst overall there has been little compensating
market level rate increase in 2025.
At an overall level this is likely to drive reduced market-level profitability
in 2026 although this may look very different for individual competitors, such
as Sabre, where underwriting profitability has remained the focus.
Capital and dividend
We have increased our dividend to 13.5p per share for 2025, reflecting
increased profits and strong capital generation. While our post-dividend
solvency ratio of 161.5% is below 2024, this remains above our preferred
operating range. The Board has elected to use additional capital, paying down
into the range, to execute a buyback of £5m, the same amount as in the
previous year. This is indicative of the Board's confidence in the Group's
robust capital position and ability to generate further capital as we look to
grow through to our Ambition 2030 target.
People
Our success in 2025 and confidence about the future are entirely due to the
efforts and commitment of all Sabre's people. In 2025 the whole business
excelled in pushing to deliver the in-year result as well as continuing to
develop our Ambition 2030 plans.
In return we were delighted to be able to pay a Christmas Bonus as well as
performance bonuses. In addition, in the year we agreed an extra day's holiday
for all staff to be taken on or around their birthday.
Our hybrid way of working with all staff spending a minimum of 3 days in the
office continues to work well for the business and our people and we have no
plans to change this.
Environmental, Social and Governance ("ESG")
Environmental, social and governance matters remain integral to how we make
decisions as a business. We continue to uphold our environmental commitments
and values, ensuring fairness to our people, customers, partners and the
planet. During the year, we have made continued progress towards our net-zero
ambitions, as outlined in the 'Responsibility and Sustainability' section of
this report on pages 54 to 66 of the 2026 Annual Report and Accounts.
Artificial intelligence
Throughout the year we continued to position the business to benefit from
potential AI driven opportunities and to manage the threats arising from AI.
This includes running numerous efficiency tests, utilising large language
models and other novel pricing and analysis models and preparing for possible
medium-term changes in distribution - for example AI driven premium
comparisons. Overall, we believe that as a focused product manufacturer AI
will benefit rather than threaten our business.
Outlook for 2026
We will continue to focus on writing business at our target margins, with
overall premium levels being influenced by market pricing dynamics. As the
year progresses, we expect to begin seeing the noticeable positive premium
impact of our Ambition 2030 plans. We expect the Group to continue premium
growth in 2026, and to deliver a profit slightly ahead of 2025 as the
high-margin business written in 2025 earns through. I anticipate we will
continue to deliver sustainable profitable growth as we move towards 2030.
In my next report I look forward to providing more detail on the development
and impact of this work, as well as reporting another strong in year
performance. Huge thanks to all our people for making this happen, and to the
board members for their continuing support and constructive challenge.
Geoff Carter
Chief Executive Officer
9 March 2026
Chief Financial Officer's Review
"Demonstrating Sabre's strengths through the market cycle."
Adam Westwood
Chief Financial Officer
Highlights
2025 2024
Gross written premium* £202.9m £236.4m
Net insurance margin* 19.2% 17.6%
Net loss ratio* 54.1% 58.7%
Combined operating ratio* 82.3% 84.2%
IFRS profit before tax £51.0m £48.6m
IFRS profit after tax £37.9m £36.0m
Solvency coverage ratio (pre-dividend)* 198.7% 216.6%
Solvency coverage ratio (post-dividend)* 161.5% 171.1%
Return on tangible equity* 37.2% 38.2%
* Alternative performance metrics are reconciled to IFRS reported figures on
pages 212 to 216 of the 2026 Annual Report and Accounts
Executive summary
Sabre's performance in 2025 has demonstrated the strength of the Group's core
strategy and delivered a strong result despite challenging market conditions.
The Group has grown profit before tax by 4.9% and improved margin by 1.6ppts
through deploying strict pricing discipline and balancing profitability with
the volume of business written, allowing the top-line to decrease as market
pricing has remained below inflation.
Whilst the motor insurance market is expected to experience a drop in
profitability in 2026, Sabre's approach has provided a strong foundation for
continuing profitable growth as the Group delivers consistent profitability
and capital returns.
Insurance revenue
2025 2024
Gross written premium £202.9m £236.4m
Movement in unearned element of liability for remaining coverage £11.7m £7.2m
Gross earned premium £214.6m £243.6m
Customer instalment income £3.4m £4.5m
Insurance revenue £218.0m £248.1m
Reinsurance expense (£23.9m) (£33.6m)
Net insurance revenue £194.1m £214.5m
Gross written premium by product
Motor vehicle £180.1m £209.9m
Motorcycle £10.6m £9.7m
Taxi £12.2m £16.8m
Policy counts by product
Motor vehicle ('000) 201 217
Motorcycle ('000) 40 38
Taxi ('000) 8 11
The 14.2% decline in premium was as expected given market pricing decreases
during the year, with Sabre pricing to ensure bottom-line stability and
allowing volumes of business written to drop in unfavourable conditions, in
line with our long-term strategy. The dip in premium was weighted towards the
first half of the year, with conditions stabilising in the second half
allowing a gradual return to growth in the fourth quarter.
Whilst the Taxi business has been in a holding pattern to preserve
profitability in a difficult market, we have started to grow the Motorcycle
business, which now operates through an established broker relationship and
the Sabre Direct brand, launched in 2025 and a cornerstone of the Group's
Ambition 2030 initiatives. The Sabre Direct brand remains deliberately
restricted as we gain comfort in the product, and we expect to continue to
release these restrictions and grow the product throughout 2026.
The 'unearned' element of the liability for remaining coverage represents the
element of written premium covering future periods, which has the effect of
smoothing gross earned premium ("GEP") (and therefore insurance revenue) over
time, so where there is a big change in written premium, insurance revenue
will change more slowly. Customer instalment income reflects the interest
income charged on instalment policies and remains a relatively small
percentage of the Group's total insurance revenue.
Gross written premium(1) IFRS profit before tax
£202.9m £51.0m
2024 | £236.4m 2024 | £48.6m
1 Alternative performance measure. For reconciliations to alternative
performance measures, see pages 212 to 216 of the 2026 Annual Report and
Accounts
Insurance expense
2025 2024
Undiscounted gross claims incurred £173.8m £143.8m
Discounting ((1)) (£23.3m) (£14.3m)
Directly attributable expenses £7.2m £7.0m
Amortisation of insurance acquisition costs £16.8m £18.2m
Insurance service expense £174.5m £154.7m
Undiscounted reinsurance recoveries (£70.6m) (£21.5m)
Discounting ((1)) £16.0m £8.4m
Net insurance expense £119.9m £141.6m
Current accident year net loss ratio ((2)) 59.6% 58.2%
Impact of the development of prior accident years ((2)) (5.5%) 0.5%
Financial-year net loss ratio 54.1% 58.7%
Net loss ratio by product
Motor vehicle 50.5% 56.1%
Motorcycle 70.0% 58.6%
Taxi 88.0% 95.7%
Discounted ratios
Discounted financial-year net loss ratio 50.4% 55.4%
(1) Includes discounting on Period Payment Orders ("PPOs")
(2) Calculation of undiscounted net loss ratio allows for the impact of
discounting on long-term non-life annuities, Periodic Payment Orders ("PPOs"),
consistent with presentation under IFRS 4
The Group delivered excellent profitability in its core product in 2025, with
a 5.6ppts improvement in Motor loss ratio reflecting strong pricing in both
2024 and 2025 earning through. Performance of the Motorcycle business, which
being small is subject to natural volatility, improved significantly in the
second half of 2025 and delivered an acceptable result with strong
underwriting profitability expected to be shown over the medium term. The Taxi
loss ratio improved on 2024 and this product is being written in line with our
target margins. As with Motorcycle, this product will show big shifts in loss
ratio given the small size of the book.
There was a 5.5% favourable movement on prior-year reserves - a combination of
normal levels of IFRS risk adjustment run-off and some positive development of
prior years in 2025. The current-year loss ratio is in line with
our expectations and reflects our continued cautious view of inflation.
Overall, the financial-year loss ratio of 54.1% has allowed us to deliver a
net insurance margin of 19.2%, well within our target range.
Other operating expenditure
2025 2024
Employee expenses £18.2m £15.4m
IT expenses £6.9m £6.8m
Industry levies £5.7m £6.0m
Policy servicing costs £2.1m £3.2m
Other operating expenses £4.2m £3.9m
Before adjustment for directly attributable claims expenses £37.1m £35.3m
Reclassification of directly attributable claims expenses (£7.2m) (£7.0m)
Total operating expenses £29.9m £28.3m
Expense ratio 28.2% 25.5%
The significant proportion of variable cost within the business has meant that
the expense ratio has moved out by only 2.7ppts despite adverse operating
leverage given the 9.2% reduction in net earned premium in 2025 and ongoing
economic cost inflation.
In absolute terms, expenses (before adjustment for directly attributable
claims expenses) have increased by 5.1% during the year. This increase is
driven primarily by employee expenses. Since the prior year, employee numbers
have increased by approximately 3%, reflecting continued investment in the
business ahead of expected growth in 2026 and beyond. The average pay rise in
2025 was approximately 3.7% (including individual one-off salary increases).
Staff bonus costs incurred in 2025 - which were based on salaries paid in 2024
- increased due to relatively high pay rises given to staff in 2024. Employee
expenses also impacted by the increase in National Insurance from April 2025.
Other income
2025 2024
Interest revenue calculated using the effective interest method £11.7m £7.9m
Other technical income £0.6m £0.7m
Total interest and other income £12.3m £8.6m
2025 2024
Insurance finance expense from insurance contracts issued (£10.0m) (£8.4m)
Reinsurance finance income from reinsurance contracts held £4.2m £3.7m
Net insurance financial result (£5.8m) (£4.7m)
Other technical income, related to non-insurance revenue earned such as
product fees (excluding instalment interest) and commissions, remains a very
small element of the Group's income. Interest revenue reflects the yield
achieved across the Group's investment portfolio. The continued increase in
interest revenue reflects the higher yield gained through reinvesting matured
assets.
The Group's investment strategy remains unchanged, being invested in a
low-risk mix of UK Government bonds, other government-backed securities and
diversified investment-grade corporate bonds.
Fair value gains and losses are taken through other comprehensive income and
largely reflect market movements in the yields of risk-free and low-risk
assets. We do not expect to realise any of these market value movements
within profit, as we continue to hold invested assets to maturity.
Insurance and reinsurance finance income/(expense) reflects the run-off of
discounting applied to insurance liabilities under IFRS 17. As cash flows move
towards settlement, the total level of discounting is reduced and this
reduction is reflected here. The increase in 2025 reflects the discount rates
applied at the point claims were incurred and is a function of the run-off
patterns applied to claims costs when they are incurred.
Taxation
In 2025 the Group recorded a corporation tax expense of £13.0m (2024:
£12.6m), with an effective tax rate of 25.6%, (2024: 25.9%). The effective
tax rate is slightly higher than the current 25% rate of corporation tax in
the UK, reflecting the tax impact of the Group's employee share schemes. The
Group has not entered into any complex or unusual tax arrangements during the
year.
Earnings per share
2025 2024
Basic earnings per share 15.37p 14.48p
Diluted earnings per share 15.26p 14.37p
Basic earnings per share of 15.37p is largely proportionate to profit after
tax, with a slight improvement due to the reduction in total shares in issue
from 250.0m to 246.6m following the share buyback executed during the year.
Diluted earnings per share is similarly proportionate to profit after tax,
taking into account the potentially dilutive effect of the Group's share
schemes. No shares have been issued during the year.
Cash and investments
2025 2024
Government bonds £124.8m £112.8m
Government-backed securities £100.7m £103.3m
Corporate bonds £100.2m £95.1m
Cash and cash equivalents £25.5m £31.3m
Total cash and investment holdings have increased slightly, reflecting normal
variances in these balances throughout the year. The level of cash retained
reflects Sabre's normal liquidity requirements and there has been no change in
the overall investment strategy, with gilts and government-backed assets
remaining the majority of the portfolio, with c.30% of invested assets held in
investment-grade corporate bonds.
Insurance liabilities
2025 2024
Gross insurance liabilities £460.7m £397.9m
Reinsurance assets (£216.4m) (£160.8m)
Net insurance liabilities £244.3m £237.1m
The Group's net insurance liabilities continue to reflect the underlying
profitability and volume of business written. Generally, the gross insurance
liabilities are more volatile and impacted by the receipt and settlement of
individually large claims. The level of net insurance liabilities held remains
broadly proportionate to the volume of business written along with the
inflation applied to claims costs.
Leverage
The Group continues to hold no external debt. All of the Group's capital is
considered Tier 1 under the UK regulatory regime. The Directors continue to
hold the view that this allows the greatest operational flexibility for the
Group.
Dividends and solvency
2025 2024
Interim ordinary dividend (paid) 3.4p 1.7p
Final ordinary dividend (proposed) 8.9p 8.4p
Total ordinary dividend (paid and proposed) 12.3p 10.1p
Special dividend (proposed) 1.2p 2.9p
Total dividend for the year (paid and proposed) 13.5p 13.0p
The dividend proposed is in line with the Group's policy to pay an ordinary
dividend of 70% to 80% of profit after tax, and to consider passing excess
capital to shareholders by way of a special dividend. We also consider using
excess capital to fund a share buyback where this is considered to be
appropriate.
For 2025, the Group has announced a total ordinary dividend of 12.3p, 80% of
profit after tax, and a special dividend of 1.2p, taking the total dividend in
respect of 2025 to 13.5p (2024: 13.0p).
The Group's post-dividend SCR coverage ratio at 31 December 2025 is 161.5%
(2024: 171.1%).
We have announced this year that the Group intends to operate its second share
buyback programme, having completed the first in 2025. This is expected to
distribute an additional £5.0m of excess capital, subject to regulatory
approval. The Group's year-end post-dividend and post-buyback SCR coverage
ratio is 154.0%.
Adam Westwood
Chief Financial Officer
9 March 2026
Consolidated Profit or Loss Account
For the year ended 31 December 2025
Notes £'k £'k
Insurance revenue 217,990 248,131
Insurance service expense (174,491) (154,661)
Insurance service result before reinsurance contracts held 43,499 93,470
Reinsurance expense (23,872) (33,617)
Amounts recoverable from reinsurers for incurred claims 54,552 13,026
Net income/(expense) from reinsurance contracts held 30,680 (20,591)
Insurance service result 74,179 72,879
Interest income on financial assets using effective interest rate method 4.5 11,719 7,926
Realised gains on derecognition of debt securities measured at FVOCI 4.6 7 -
Total investment income 11,726 7,926
Insurance finance expense from insurance contracts issued 3.8 (9,968) (8,392)
Reinsurance finance income from reinsurance contracts held 3.8 4,236 3,714
Net insurance financial result (5,732) (4,678)
Net insurance and investment result 80,173 76,127
Other income 7 637 740
Other operating expenses 8 (29,850) (28,305)
Profit before tax 50,960 48,562
Income tax expense 10 (13,045) (12,601)
Profit for the year attributable to ordinary shareholders 37,915 35,961
Basic earnings per share (pence per share) 19 15.37 14.48
Diluted earnings per share (pence per share) 19 15.26 14.37
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2025
2025 2024
Notes £'k £'k
Profit for the year attributable to ordinary shareholders 37,915 35,961
Items that are or may be reclassified subsequently to Profit or Loss
Unrealised fair value gains on debt securities 4.6 5,525 3,774
Realised gains on derecognition of debt securities reclassified to Profit or 4.6 (7) -
Loss
Tax charge (1,381) (944)
Debt securities at fair value through Other Comprehensive Income 4,137 2,830
Insurance finance (expense)/income from insurance contracts issued 3.8 (5,808) 6,852
Reinsurance finance income/(expense) from reinsurance contracts held 3.8 2,856 (5,880)
Tax credit 738 395
Net insurance financial result (2,214) 1,367
Total other comprehensive income for the year, net of tax 1,923 4,197
Total comprehensive income for the year attributable to ordinary shareholders 39,838 40,158
Consolidated Statement of Financial Position
As at 31 December 2025
2025 2024
Notes £'k £'k
Assets
Cash and cash equivalents 4.1 25,475 31,314
Debt securities at fair value through Other Comprehensive Income 4.2 325,752 311,184
Receivables 4.3 41 32
Current tax assets 209 997
Reinsurance contract assets 3.1 216,382 160,758
Property, plant and equipment 9 4,278 4,204
Deferred tax assets 11 82 265
Other assets 13 799 778
Goodwill 14 156,279 156,279
Total assets 729,297 665,811
Liabilities
Payables 5 7,048 6,995
Insurance contract liabilities 3.1 460,682 397,924
Other liabilities 3,705 2,546
Total liabilities 471,435 407,465
Equity
Issued share capital 15 247 250
Own shares 15, 17 (3,354) (3,112)
Merger reserve 17 48,525 48,525
FVOCI reserve 17 1,073 (3,064)
Insurance/Reinsurance finance reserve 17 1,392 3,606
Share-based payments reserve 17 3,495 2,620
Retained earnings 206,484 209,521
Total equity 257,862 258,346
Total liabilities and equity 729,297 665,811
Consolidated Statement of Changes in Equity
For the year ended 31 December 2025
Share capital Own shares Merger reserve FVOCI reserve Insurance/ Share-based payments reserve Retained earnings Total equity
Reinsurance
finance reserve
Notes £'k £'k £'k £'k £'k £'k £'k £'k
Balance as at 1 January 2024 250 (3,121) 48,525 (5,894) 2,239 2,686 197,727 242,412
Profit for the year attributable to ordinary shareholders - - - - - - 35,961 35,961
Total other comprehensive income for the year, net of tax: Items that are or - - - 2,830 1,367 - - 4,197
may be reclassified subsequently to Profit or Loss
Total comprehensive income/(expense) for the year - - - 2,830 1,367 - 35,961 40,158
Share-based payment expense - - - - - (66) 182 116
Net movement in own shares - 9 - - - - - 9
Dividends paid - - - - - - (24,349) (24,349)
Balance as at 31 December 2024 250 (3,112) 48,525 (3,064) 3,606 2,620 209,521 258,346
Profit for the year attributable to ordinary shareholders - - - - - - 37,915 37,915
Total other comprehensive income for the year, net of tax: Items that are or - - - 4,137 (2,214) - - 1,923
may be reclassified subsequently to Profit or Loss
Total comprehensive income/(expense) for the year - - - 4,137 (2,214) - 37,915 39,838
Share-based payment expense - - - - - 875 450 1,325
Net movement in own shares - (242) - - - - - (242)
Share buyback 15 (3) - - - - - (5,064) (5,067)
Dividends paid - - - - - - (36,338) (36,338)
Balance as at 31 December 2025 247 (3,354) 48,525 1,073 1,392 3,495 206,484 257,862
Consolidated Statement of Cash Flows
For the year ended 31 December 2025
2025 2024
Notes £'k £'k
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year 50,960 48,562
Adjustments for:
Depreciation of property, plant and equipment 9 179 184
Share-based payment - equity-settled schemes 16 2,142 1,607
Investment return (10,589) (6,458)
Expected credit loss 4.4 3 5
Operating cash flows before movements in working capital 42,695 43,900
Movements in working capital:
Change in receivables (9) 55
Change in reinsurance contract assets (52,768) 88
Change in other assets (21) (4)
Change in payables 53 (2,705)
Change in insurance contract liabilities 56,950 29,937
Change in other liabilities 1,159 (641)
Cash generated from operating activities before investment of insurance assets 48,059 70,630
Taxes paid (12,717) (12,286)
Net cash generated from operating activities before investment of insurance 35,342 58,344
assets
Interest and investment income received 8,484 5,248
Proceeds from the sale and maturity of invested assets 93,465 98,656
Purchases of invested assets (100,412) (140,180)
Net cash generated from operating activities 36,879 22,068
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment 9 (253) -
Net cash used by investing activities (253) -
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash used in acquiring and disposing of own shares (1,069) (1,484)
Options exercised under share option schemes 9 -
Share buyback 15 (5,067) -
Dividends paid 12 (36,338) (24,349)
Net cash used by financing activities (42,465) (25,833)
Net decrease in cash and cash equivalents (5,839) (3,765)
Cash and cash equivalents at the beginning of the year 31,314 35,079
Cash and cash equivalents at the end of the year 25,475 31,314
Notes to the Consolidated Financial Statements
For the year ended 31 December 2025
Corporate information
Sabre Insurance Group plc is a company incorporated in the United Kingdom and
registered in England and Wales. The address of the registered office is Sabre
House, 150 South Street, Dorking, Surrey, RH4 2YY, England. The nature of the
Group's operations is the writing of general insurance for motor vehicles,
including taxis and motorcycles. The Company's principal activity is that of a
holding company.
1. Accounting Policies
The principal accounting policies applied in the preparation of these
Consolidated and Company Financial Statements are included in the specific
notes to which they relate. These policies have been consistently applied to
all the years presented, unless otherwise indicated.
1.1. Basis of preparation
The financial statements of the Group have been prepared in accordance with
UK-adopted international accounting standards, comprising International
Accounting Standards ("IAS") and International Financial Reporting Standards
("IFRS"), and the requirements of the Companies Act 2006. Endorsement of
accounting standards is granted by the UK Endorsement Board ("UKEB").
The financial statements are prepared in accordance with the going concern
principle using the historical cost basis, except for those financial assets
and owner-occupied properties that have been measured at fair value. The
preparation of the financial statements necessitates the use of estimates,
assumptions and judgements that affect the reported amounts in the Statement
of Financial Position and the Profit or Loss Account and Statement of
Comprehensive Income. Where appropriate, details of estimates are presented in
the accompanying notes to the Consolidated Financial Statements.
As the full impact of climate change is currently unknown, it is not possible
to consider all possible future outcomes when determining the value of assets,
liabilities and the timing of future cash flows. The Group's view is that any
reasonable impact of climate change would not have a material impact on the
valuation of assets and liabilities at the year-end date.
The financial statements values are presented in pounds sterling (£) rounded
to the nearest thousand (£'k), unless otherwise indicated.
The Group presents its Statement of Financial Position broadly in order of
liquidity. An analysis regarding recovery or settlement within 12 months after
the reporting date (current) and more than 12 months after the reporting date
(non-current) is presented in the respective notes.
Financial assets and financial liabilities are offset and the net amount
reported in the Statement of Financial Position only when there is a legally
enforceable right to offset the recognised amounts and there is an intention
to settle on a net basis, or to realise the assets and settle the liability
simultaneously.
1.2. Going concern
The Consolidated Financial Statements have been prepared on a going concern
basis. The Directors have a reasonable expectation that the Group has adequate
resources to continue in operation for at least 12 months from the date the
Directors approved these Financial Statements and that therefore it is
appropriate to adopt a going concern basis for the preparation of the
Financial Statements. In making their assessment, the Directors took into
account the potential impact of the principal risks that could prevent the
Group from achieving its strategic objectives.
The assessment was based on the Group's Own Risk and Solvency Assessment
("ORSA"), which brings together management's view of current and emerging
risks, with scenario-based analysis and reverse stress testing to form a
conclusion as to the financial stability of the Group.
Consideration was also given to what the Group considers its principal risks
which are set out in the Principal Risks and Uncertainties section on pages 22
to 30 of the Strategic Report in the 2026 Annual Report and Accounts. The
assessment also included consideration of any scenarios which might cause the
Group to breach its solvency requirements which are not otherwise covered in
the risk-based scenario testing.
We have assessed the short-, medium- and long-term risks associated with
climate change. Given the geographical diversity of the Group's policyholders
within the UK, and the Group's reinsurance programme, it is highly unlikely
that a climate event will materially impact Sabre's ability to continue
trading. More likely is that the costs associated with the transition to a
low-carbon economy will impact the Group's indemnity spend, as electric
vehicles are currently relatively expensive to fix. We expect that this is
somewhat, or perhaps completely, offset by advances in technology reducing the
frequency of claims, in particular bodily injury claims which are generally
far more expensive than damage to vehicles. These changes in the costs of
claims are gradual and as such reflected in our claims experience and fed into
the pricing of our policies.
1.3. New and amended standards and interpretations adopted by the Group
Amendments to IFRS
The following amended IFRS standards became effective for the year ended 31
December 2025:
Amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates": "Lack
of Exchangeability"
None of the amendments have had a material impact on the Group.
1.4. New and amended standards and interpretations not yet effective in 2025
A number of new standards and interpretations adopted by the UK which are not
mandatorily effective, as well as standards' interpretations issued by the
IASB but not yet adopted by the UK, have not been applied in preparing these
financial statements. The Group does not plan to adopt these standards early;
instead, it expects to apply them from their effective dates as determined by
their dates of UK endorsement. These standards are not expected to have a
significant impact on the results within the financial statements.
Annual improvements to IFRS - Volume 11 (effective 1 January 2026). Annual
improvements are limited to changes that either clarify the wording in an
Accounting Standard or correct relatively minor unintended consequences,
oversights or conflicts between the requirements in the Accounting Standards.
This includes minor clarifications to IFRS 7 "Financial Instruments:
Disclosures", IFRS 9 "Financial Instruments", IFRS 10 "Consolidated Financial
Statements", and IAS 7 "Statement of Cash Flows".
IFRS 18 "Presentation and Disclosure in Financial Statements" - Effective 1
January 2027, with retrospective application - IFRS 18, which replaces IAS 1
"Presentation of Financial Statements", introduces new requirements for
presentation and disclosure in the financial statements, with a focus on the
Profit or Loss Account. Items in the Profit or Loss Account will be classified
into one of five categories: operating, investing, financing, income taxes and
discontinued operations, of which the first three are new. It also requires
the disclosure of newly defined management-derived performance measures, how
these are calculated and why these provide useful information, reconciled to
the IFRS reporting. As a presentation and disclosure standard, the
implementation of IFRS 18 will not affect the Group's results. The Group is
currently working to identify all impacts the amendments will have on the
primary financial statements and notes to the financial statements.
Amendment to IFRS 9 and IFRS 7 (effective 1 January 2026). These amendments
clarify the requirements for the timing of recognition and derecognition of
some financial assets and liabilities, clarify and add further guidance for
assessing whether a financial asset meets the solely payments of principal and
interest ("SPPI") criterion, add new disclosures for certain instruments with
contractual terms that can change cash flows and make updates to the
disclosures for equity instruments designated at Fair Value through Other
Comprehensive Income ("FVOCI").
IFRS 19 "Subsidiaries without Public Accountability: Disclosures" (effective 1
January 2027). This new standard reduces the disclosure requirements for
subsidiaries while maintaining the usefulness of the information for users of
their financial statements. Subsidiaries are eligible to apply IFRS 19 if they
do not have public accountability and their parent company applies IFRS in
their consolidated financial statements. As the principal subsidiary of the
Group is a public interest entity, the Group does not expect any significant
impact from IFRS 19.
2. Risk and Capital Management
2.1. Risk management framework
The Sabre Insurance Group plc Board is responsible for prudent oversight of
the Group's business and financial operations, ensuring that they are
conducted in accordance with sound business principles and with applicable
laws and regulations, and ensure fair customer outcomes. This includes
responsibility to articulate and monitor adherence to the Board's appetite for
exposure to all risk types. The Board also ensures that measures are in place
to provide independent and objective assurance on the effective identification
and management of risk and on the effectiveness of the internal controls in
place to mitigate those risks.
The Board has set a robust risk management strategy and framework as an
integral element in its pursuit of business objectives and in the fulfilment
of its obligations to shareholders, regulators, customers and employees.
The Group's risk management framework is proportionate to the risks that we
face. Our assessment of risk is not static; we continually reassess the risk
environment in which the Group operates and ensure that we maintain
appropriate mitigation in order to remain within our risk appetite. The
Group's Management Risk and Compliance Forum gives management the regular
opportunity to review and discuss the risks which the Group faces, including
but not limited to any breaches, issues or emerging risks. The Forum also
works to ensure that adequate mitigation for the risks the Group is exposed to
are in place.
2.2. Underwriting risk
The principal risk the Group faces under insurance contracts is that the
actual claims and benefit payments, or the timing thereof, differ from
expectations. This is influenced by the frequency of claims, severity of
claims, actual benefits paid and subsequent development of long-term claims.
Therefore, the objective of the Group is to ensure that sufficient reserves
are available to cover these liabilities.
The Group issues only motor insurance contracts, which usually cover a
12-month duration. For these contracts, the most significant risks arise from
under-estimation of the expected costs attached to a policy or a claim, for
example through unexpected inflation of costs or single catastrophic events.
Refer to Note 3.6 for detail on these risks and the way the Group manages
them. Note 3.6 also includes the considerations of climate change. Further
discussion on climate change can be found in the Principal Risks and
Uncertainties section on pages 22 to 30 of the Strategic Report and the
Responsibility and Sustainability section on pages 41 to 67 of the 2026 Annual
Report and Accounts.
2.3. Credit risk
Credit risk reflects the financial impact of the default of one or more of the
Group's counterparties. The Group is exposed to financial risks caused by a
loss in the value of financial assets due to counterparties failing to meet
all or part of their obligations. Key areas where the Group is exposed to
credit default risk are:
‒ Failure of an asset counterparty to meet their financial
obligations (Note 4.4)
‒ Reinsurers default on their share of the Group's insurance
liabilities (Note 3.7)
‒ Default on amounts due from insurance contract
intermediaries or policyholders (Note 3.7)
2.3. Credit risk
Credit risk reflects the financial impact of the default of one or more of the
Group's counterparties. The Group is exposed to financial risks caused by a
loss in the value of financial assets due to counterparties failing to meet
all or part of their obligations. Key areas where the Group is exposed to
credit default risk are:
‒ Failure of an asset counterparty to meet their financial
obligations (Note 4.4)
‒ Reinsurers default on their share of the Group's insurance
liabilities (Note 3.7)
‒ Default on amounts due from insurance contract
intermediaries or policyholders (Note 3.7)
The following policies and procedures are in place to mitigate the Group's
exposure to credit risk:
‒ A Group credit risk policy which sets out the assessment
and determination of what constitutes credit risk for the Group. Compliance
with the policy is monitored and exposures and breaches are reported to the
Group's Risk Committee
‒ Reinsurance is placed with counterparties that have a good
credit rating and concentration of risk is avoided by following policy
guidelines in respect of counterparties' limits that are set each year by the
Board of Directors and are subject to regular reviews. At each reporting date,
management performs an assessment of creditworthiness of reinsurers and
updates the reinsurance purchase strategy, ascertaining a suitable allowance
for impairment
‒ The Group sets the maximum amounts and limits that may be
advanced to corporate counterparties by reference to their long-term
credit ratings
‒ The credit risk in respect of customer balances incurred
on non-payment of premiums or contributions will only persist during the grace
period specified in the policy document or trust deed until expiry, when the
policy is either paid up or terminated. Commission paid to intermediaries is
netted off against amounts receivable from them to reduce the risk of doubtful
debts
Refer to Notes 3.7 and 4.4 as indicated above for further information on
credit risk.
2.4. Liquidity risk
Liquidity risk is the potential that obligations cannot be met as they fall
due as a consequence of having a timing mismatch or inability to raise
sufficient liquid assets without suffering a substantial loss on realisation.
The Group manages its liquidity risk through both ensuring that it holds
sufficient cash and cash equivalent assets to meet all short-term liabilities,
and matching the maturity profile of its financial investments to the expected
cash outflows.
Refer to Note 6 for further information on liquidity risk.
2.5. Investment concentration risk
Excessive exposure to particular industry sectors or groups can give rise to
concentration risk. The Group has no significant investment in any particular
industrial sector and therefore is unlikely to suffer significant losses
through its investment portfolio as a result of over-exposure to sectors
engaged in similar activities or which have similar economic features that
would cause their ability to meet contractual obligations to be similarly
affected by changes in economic, political or other conditions.
A significant part of the Group's investment portfolio consists primarily of
UK government bonds and government-backed bonds; therefore, the risk of
government default does exist, however, the likelihood is extremely remote.
The remainder of the portfolio consists of investment grade corporate bonds.
The Group continues to monitor the strength and security of all bonds.
The Group's portfolio has a significant concentration of UK debt securities
and therefore is exposed to movements in UK interest rates.
Refer to Note 4.2.1 for further information on investment concentration risk.
2.6. Operational risk
Operational risk is the risk of loss arising from system failure, cyber
attack, human error, fraud or external events. When controls fail to perform,
operational risks can cause damage to reputation, have legal or regulatory
implications or can lead to financial loss. The Group cannot expect to
eliminate all operational risks, but by operating a rigorous control framework
and by monitoring and responding to potential risks, the Group is able to
manage the risks. Controls include effective segregation of duties, access
controls, authorisation and reconciliation procedures, staff education and
assessment processes, including the use of internal audit. Business risks such
as changes in environment, technology and the industry are monitored through
the Group's strategic planning and budgeting process.
2.7. Capital management
The Board of Directors has ultimate responsibility for ensuring that the Group
has sufficient funds to meet its liabilities as they fall due. The Group
carries out detailed modelling of its assets and liabilities, and the key
risks to which these are exposed. This modelling includes the Group's own
assessment of its capital requirements for solvency purposes.
The Group has continued to manage its solvency with reference to the solvency
capital requirement ("SCR") calculated using the standard formula. The Group
has developed sufficient processes to ensure that the capital requirements
under Solvency II are not breached, including the maintenance of capital at a
level higher than that required through the standard formula. The Group
considers its capital position to be its net assets on a Solvency II basis and
monitors this in the context of the Solvency II SCR.
The Group aims to retain sufficient capital such that in all reasonably
foreseeable scenarios, it will hold regulatory capital in excess of its SCR.
The Directors currently consider that this is achieved through maintaining a
regulatory capital surplus of 140% to 160%. As at 31 December 2025, the Group
holds significant excess Solvency II capital.
The Group's IFRS capital comprised:
As at 31 December
2025 2024
£'k £'k
Share capital 247 250
Own shares (3,354) (3,112)
Merger reserve 48,525 48,525
FVOCI reserve 1,073 (3,064)
Insurance/Reinsurance finance reserve 1,392 3,606
Share-based payments reserve 3,495 2,620
Retained earnings 206,484 209,521
Total 257,862 258,346
The Solvency II position of the Group both before and after proposed final
dividend is given below:
As at 31 December
2025 2024
£'k £'k
Total tier 1 capital - pre-dividend 133,080 134,695
SCR 66,986 62,199
Solvency coverage ratio (%) - pre-dividend 198.7% 216.6%
As at 31 December
2025 2024
£'k £'k
Total tier 1 capital - pre-dividend 133,080 134,695
Less: Final dividend declared (24,907) (28,250)
Total tier 1 capital - post-dividend 108,173 106,445
SCR 66,986 62,199
Solvency coverage ratio (%) 161.5% 171.1%
The following table sets out a reconciliation between IFRS net assets and
Solvency II net assets before proposed final dividend:
As at 31 December
2025 2024
£'k £'k
IFRS net assets 257,862 258,346
Less: Goodwill (156,279) (156,279)
Adjusted IFRS net assets 101,583 102,067
Remove IFRS liability: Liability for remaining coverage (unearned premium 105,596 117,245
element)
Remove IFRS asset: Insurance acquisition cash flow asset (7,789) (8,472)
Remove IFRS liability: Risk adjustment 15,773 14,304
Add Solvency II liability: Risk margin (7,440) (6,975)
Add Solvency II liability: Premium provision (63,276) (74,613)
Changes in valuation differences of technical reserves between IFRS and (867) 2,015
Solvency II
Change in deferred tax liability due to difference in net asset position (10,500) (10,876)
Solvency II net assets 133,080 134,695
The adjustments set out in the above table have been made for the following
reasons:
‒ Adjusted IFRS net assets: Equals Group net assets on an
IFRS basis, less Goodwill.
‒ Removal of liability for remaining coverage and insurance
acquisition cash flow asset: Liability for remaining coverage is not treated
as a liability under Solvency II.
‒ Removal of insurance acquisition cash flow asset:
Insurance acquisition cash flow asset is not deferred under Solvency II.
‒ Removal of IFRS risk adjustment: Solvency II risk margin
replaces IFRS risk adjustment.
‒ Addition of Solvency II risk margin: The Solvency II risk
margin represents the premium that would be required were the Group to
transfer its technical provisions to a third party, and essentially reflects
the SCR required to cover run-off of claims on existing business. This amount
is calculated by the Group through modelling the discounted SCR on a projected
future balance sheet for each year of claims run-off.
‒ Addition of Solvency II premium provision: A premium
reserve reflecting the future cash flows in respect of insurance contracts is
calculated and this must be discounted under Solvency II.
‒ Changes in valuation differences: Valuation differences of
technical differences between IFRS 17 and Solvency II, including discounting.
‒ Change in deferred tax: As the move to a Solvency II basis
balance sheet increases the net asset position of the Group, a deferred tax
liability is generated to offset the increase.
Sabre Insurance Group plc's SCR, expressed on a risk module basis, is set out
in the following table:
As at 31 December
2025 2024
£'k £'k
Interest rate risk 4,149 5,289
Equity risk - -
Property risk 900 900
Spread risk 4,691 3,109
Currency risk 888 584
Concentration risk - -
Correlation impact (3,602) (3,226)
Market risk 7,026 6,656
Counterparty risk 4,333 3,325
Underwriting risk 70,928 68,011
Correlation impact (7,311) (6,678)
Basic SCR 74,976 71,314
Operating risk 10,754 8,714
Loss-absorbing effect of deferred taxes (18,744) (17,829)
Total SCR 66,986 62,199
The total SCR is primarily driven by the underwriting risk element, which is a
function of the Group's net earned premium (or projected net earned premium)
and the level of reserves held. Therefore, the SCR is broadly driven by the
size of the business.
The Group's capital management objectives are:
‒ To ensure that the Group will be able to continue as a
going concern
‒ To maximise the income and capital return to its equity
The Board monitors and reviews the broad structure of the Group's capital on
an ongoing basis. This review includes consideration of the extent to which
revenue in excess of that which is required to be distributed should be
retained.
The Group's objectives, policies and processes for managing capital have not
changed during the year.
3. Insurance Liabilities and Reinsurance Assets
ACCOUNTING POLICY
For the purpose of this accounting policy, the term 'motor insurance' covers
all the Group's products, which includes Motor Vehicle, Motorcycle and Taxi
insurance.
A. Insurance and reinsurance contracts classification
The Group issues insurance contracts in the normal course of business, under
which it accepts significant insurance risk from a policyholder
by agreeing to compensate the policyholder if a specified uncertain future
insured event adversely affects the policyholder.
As a general guideline, the Group determines whether it has significant
insurance risk, by comparing benefits payable after an insured event with
benefits payable if the insured event did not occur.
The Group issues only non-life insurance to individuals and businesses.
Non-life insurance products offered by the Group are Motor Vehicle, Motorcycle
and Taxi insurance. These products offer protection of a policyholder's assets
and indemnification of other parties that have suffered damage as a result of
a policyholder's accident.
In the normal course of business, the Group uses reinsurance to mitigate its
risk exposures. A reinsurance contract transfers significant risks if
it transfers substantially all of the insurance risk resulting from the
insured portion of the underlying insurance contracts, even if it does not
expose the reinsurer to the possibility of a significant loss.
B. Insurance and reinsurance contracts accounting treatment
(i) Separating components from insurance and reinsurance contracts
The Group assesses its non-life insurance and reinsurance products to
determine whether they contain distinct components which must be accounted for
under another IFRS instead of under IFRS 17. After separating any distinct
components, the Group applies IFRS 17 to all remaining components of the
(host) insurance contract. Currently, the Group's products do not include any
distinct components that require separation.
(ii) Aggregation and recognition of insurance and reinsurance contracts
Insurance contracts
Insurance contracts are aggregated into groups for measurement purposes.
Groups of insurance contracts are determined by identifying portfolios of
insurance contracts, each comprising contracts subject to similar risks and
managed together, and dividing each portfolio into annual cohorts (i.e. by
year of issue) and each annual cohort into three groups based on the expected
profitability of contracts:
‒ Any contracts that are onerous on initial recognition
‒ Any contracts that, on initial recognition, have no
significant possibility of becoming onerous subsequently
‒ Any remaining contracts in the annual cohort
The Group recognises groups of insurance contracts it issues from the earliest
of:
‒ The beginning of the coverage period of the group of
contracts
‒ When the first payment from a policyholder in the group
becomes due or when the first payment is received if there is no due date
‒ When facts and circumstances indicate that the contract is
onerous
The Group adds new contracts to the group in the reporting period in which
that contract meets one of the criteria set out above.
The profitability of groups of contracts is assessed by actuarial valuation
models that take into consideration existing and new business. The Group
assumes that no contracts in the portfolio are onerous at initial recognition
unless facts and circumstances indicate otherwise. For contracts that are not
onerous, the Group assesses, at initial recognition, that there is no
significant possibility of becoming onerous subsequently by assessing the
likelihood of changes in applicable facts and circumstances. The Group
considers facts and circumstances to identify whether a group of contracts are
onerous based on:
‒ Pricing information
‒ Results of similar contracts it has recognised
‒ Environmental factors, e.g. a change in market experience
or regulations
Reinsurance contracts
Some reinsurance contracts provide cover for underlying contracts that are
included in different groups. However, the Group concludes that the
reinsurance contract's legal form of a single contract reflects the substance
of the Group's contractual rights and obligations, considering that the
different covers lapse together and are not sold separately. As a result, the
reinsurance contract is not separated into multiple insurance components that
relate to different underlying groups.
The Group recognises a group of reinsurance contracts held at the earlier of
the following:
‒ The beginning of the coverage period of the group of
reinsurance contracts held
‒ The date the Group recognises an onerous group of
underlying insurance contracts if the Group entered into the related
reinsurance contract held in the group of reinsurance contracts held at or
before that date
The Group adds new contracts to the group in the reporting period in which
that contract meets one of the criteria set out above.
(iii) Measurement
Summary of measurement approaches
The Group uses the following measurement approaches to its insurance and
reinsurance contracts.
Product classification Measurement model
Insurance contracts issued
Motor insurance Insurance contracts issued Premium Allocation Approach ("PAA")
Reinsurance contracts held
Motor insurance - excess of loss reinsurance Reinsurance contracts held Premium Allocation Approach ("PAA")
The Group applies the premium allocation approach to all the insurance
contracts that it issues and reinsurance contracts that it holds, as the
coverage period of each contract in the group is one year or less, including
insurance contract services arising from all premiums within the contract
boundary. The Group does not expect significant variability in the fulfilment
cash flows that would affect the measurement of the liability for remaining
coverage during the period before a claim is incurred.
All the Group's insurance contracts have a coverage period of one year or
less. The Group's reinsurance contracts held are excess of loss contracts and
are loss occurring. The Group does not issue any reinsurance contracts.
Insurance contracts issued
On initial recognition of each group of contracts, the carrying amount of the
liability for remaining coverage ("LRC") is measured at:
‒ The premiums received on initial recognition
‒ Minus any insurance acquisition cash flows allocated to
the group at that date
‒ Adjusted for any amount arising from the derecognition of
any assets or liabilities previously recognised for cash flows related to the
group (including assets for insurance acquisition cash flows)
The Group has chosen not to expense insurance acquisition cash flows when they
are incurred.
Subsequently, the Group measures the carrying amount of the LRC at the end of
each reporting period as the LRC at the beginning of the period:
‒ Plus premiums received in the period
‒ Minus insurance acquisition cash flows
‒ Plus any amounts relating to the amortisation of insurance
acquisition cash flows recognised as an expense in the reporting period
‒ Minus the amount recognised as insurance revenue for the
services provided in the period
On initial recognition of each group of contracts, the Group expects that the
time between providing each part of the services and the related premium due
date is no more than a year. Accordingly, the Group has chosen not to adjust
the liability for remaining coverage to reflect the time value of money and
the effect of financial risk.
If at any time during the coverage period, facts and circumstances indicate
that a group of contracts is onerous, then the Group recognises a loss in
Profit or Loss and increases the liability for remaining coverage to the
extent that the current estimates of the fulfilment cash flows that relate to
remaining coverage exceed the carrying amount of the liability for remaining
coverage. The fulfilment cash flows are discounted (at current rates) if the
liability for incurred claims is also discounted.
The Group recognises the liability for incurred claims ("LIC") of a group of
insurance contracts at the amount of the fulfilment cash flows ("FCF")
relating to incurred claims. The fulfilment cash flows are discounted (at
current rates) unless they are expected to be paid in one year or less from
the date the claims are incurred.
The carrying amount of a group of insurance contracts issued at the end of
each reporting period is the sum of:
‒ The LRC
‒ The LIC
Risk adjustment for non-financial risk
An explicit risk adjustment for non-financial risk is estimated separate from
the other estimates. Unless contracts are onerous, the explicit risk
adjustment for non-financial risk is only estimated for the measurement of the
LIC.
This risk adjustment represents the compensation that the Group requires for
bearing the uncertainty about the amount and timing of cash flows that arise
from non-financial risk. Non-financial risk is risk arising from insurance
contracts other than financial risk, which is included in the estimates of
future cash flows or the discount rate used to adjust the cash flows. The
risks covered by the risk adjustment for non-financial risk are insurance risk
and other non-financial risks such as lapse risk and expense risk.
The risk adjustment for non-financial risk for insurance contracts measures
the compensation that the Group would require to make it indifferent between:
‒ Fulfilling a liability that has a range of possible
outcomes arising from non-financial risk
‒ Fulfilling a liability that will generate fixed cash flows
with the same expected present value as the insurance contracts
Reinsurance contracts held
The excess of loss reinsurance contracts held provide coverage on the motor
insurance contracts originated for claims incurred during an accident year and
are accounted for under the PAA. The Group measures its reinsurance assets for
a group of reinsurance contracts that it holds on the same basis as insurance
contracts that it issues. For reinsurance contracts held, on initial
recognition, the Group measures the remaining coverage at the amount of ceding
premiums paid. For reinsurance contracts held, at each of the subsequent
reporting dates, the remaining coverage is:
‒ Increased for ceding premiums paid in the period
‒ Decreased for the amounts of ceding premiums recognised as
reinsurance expenses for the services received in the period
Assets for reinsurance contracts consist of the asset for remaining coverage
("ARC") and the asset for incurred claims ("AIC") being the reinsurers' share
of claims that have already been incurred.
For reinsurance contracts held, the risk adjustment for non-financial risk
presents the amount of risk being transferred by the Group to the reinsurer.
Asset for insurance acquisition cash flows
The Group includes the following acquisition cash flows within the insurance
contract boundary that arise from selling, underwriting and starting a group
of insurance contracts and that are:
a. Costs directly attributable to individual contracts and groups of contracts
b. Costs directly attributable to the portfolio of insurance contracts to
which the group belongs, which are allocated on a reasonable and consistent
basis to measure the group of insurance contracts
Insurance acquisition cash flows arising before the recognition of the related
group of contracts are recognised as an asset. Insurance acquisition cash
flows arise when they are paid or when a liability is required to be
recognised under a standard other than IFRS 17. Such an asset is recognised
for each group of contracts to which the insurance acquisition cash flows are
allocated. The asset is derecognised, fully or partially, when the insurance
acquisition cash flows are included in the measurement of the group of
contracts.
Recoverability assessment
At each reporting date, if facts and circumstances indicate that an asset for
insurance acquisition cash flows may be impaired, then the Group:
a. Recognises an impairment loss in Profit or Loss so that the carrying amount
of the asset does not exceed the expected net cash inflow for the related
group
b. If the asset relates to future renewals, recognises an impairment loss in
Profit or Loss to the extent that it expects those insurance acquisition cash
flows to exceed the net cash inflow for the expected renewals and this excess
has not already been recognised as an impairment loss under (a)
The Group reverses any impairment losses in Profit or Loss and increases the
carrying amount of the asset to the extent that the impairment conditions have
improved.
Modification and derecognition
The Group derecognises insurance contracts when:
‒ The contract is extinguished (i.e. when the obligation
specified in the insurance contract expires or is discharged or cancelled)
‒ The contract is modified and certain additional criteria
are met
When an insurance contract is modified by the Group as a result of an
agreement with the counterparties or due to a change in regulations, the Group
treats changes in cash flows caused by the modification as changes in
estimates of the FCF, unless the conditions for the derecognition of the
original contract are met. The Group derecognises the original contract and
recognises the modified contract as a new contract if any of the following
conditions are present:
a. If the modified terms had been included at contract inception and the Group
would have concluded that the modified contract:
i. Is not in scope of IFRS 17
ii. Results in different separable components
iii. Results in a different contract boundary
iv. Belongs to a different group of contracts
b. The original contract was accounted for under the PAA, but the modification
means that the contract no longer meets the eligibility criteria for that
approach
When an insurance contract accounted for under the PAA is derecognised,
adjustments to the FCF to remove relating rights and obligations, and account
for the effect of the derecognition result in the following amounts being
charged immediately to Profit or Loss:
a. If the contract is extinguished, any net difference between the
derecognised part of the LRC of the original contract and any other cash flows
arising from extinguishment
b. If the contract is transferred to the third party, any net difference
between the derecognised part of the LRC of the original contract and the
premium charged by the third party
c. If the original contract is modified resulting in its derecognition, any
net difference between the derecognised part of the LRC and the hypothetical
premium the entity would have charged had it entered into a contract with
equivalent terms as the new contract at the date of the contract modification,
less any additional premium charged for the modification
(iv) Presentation
The Group has presented separately, in the Statement of Financial Position,
the carrying amount of portfolios of insurance contracts issued and portfolios
of reinsurance contracts held.
The Group has elected to disaggregate part of the movement in LIC resulting
from the changes in discount rates and present this in the Statement of
Comprehensive Income. The Group disaggregates the total amount recognised in
the Profit or Loss Account and the Statement of Comprehensive Income into an
insurance service result, comprising insurance revenue and insurance service
expense, and insurance finance income or expenses.
The Group does not disaggregate the change in risk adjustment for
non-financial risk between a financial and non-financial portion and includes
the entire change as part of the insurance service result.
The Group separately presents income or expenses from reinsurance contracts
held from the expenses or income from insurance contracts issued.
AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS
Insurance service result from insurance contracts issued
Insurance revenue
As the Group provides insurance contract services under the group of insurance
contracts, it reduces the LRC and recognises insurance revenue. The amount of
insurance revenue recognised in the reporting period depicts the transfer of
promised services at an amount that reflects the portion of consideration that
the Group expects to be entitled to in exchange for those services.
The Group measures all insurance contracts under the PAA and recognises
insurance revenue based on the passage of time over the coverage period of a
group of contracts.
Insurance service expenses
Insurance service expenses include the following:
‒ Incurred claims and benefits
‒ Other incurred directly attributable expenses
‒ Amortisation of insurance acquisition cash flows
‒ Changes that relate to past service - changes in the FCF
relating to the LIC
‒ Changes that relate to future service - changes in the FCF
that result in onerous contract losses or reversals of those losses
Amortisation of insurance acquisition cash flows is based on the passage of
time.
Other expenses not meeting the above categories are included in other
operating expenses in the Profit or Loss Account.
Insurance service result from reinsurance contracts held
Net income/(expense) from reinsurance contracts held
The Group presents separately on the face of the Profit or Loss Account and
the Statement of Comprehensive Income, the amounts expected to be recovered
from reinsurers, and an allocation of the reinsurance premiums paid. The net
income/(expense) from reinsurance contracts held comprise:
‒ Reinsurance expenses
‒ For groups of reinsurance contracts measured under the
PAA, broker fees are included within reinsurance expenses
‒ Incurred claims recovery
‒ Other incurred directly attributable expenses
‒ Changes that relate to past service - changes in the FCF
relating to incurred claims recovery
‒ Effect of changes in the risk of reinsurers'
non-performance
‒ Amounts relating to accounting for onerous groups of
underlying insurance contracts issued
Reinsurance expenses are recognised similarly to insurance revenue. The amount
of reinsurance expenses recognised in the reporting period depicts the
transfer of received insurance contract services at an amount that reflects
the portion of ceding premiums that the Group expects to pay in exchange for
those services. Broker fees are included in reinsurance expenses.
All groups of reinsurance contracts held are measured under the PAA and
reinsurance expenses are recognised based on the passage of time over the
coverage period of a group of contracts.
AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Insurance finance income or expenses
Insurance finance income or expenses comprise the change in the carrying
amount of the group of insurance contracts arising from:
‒ The effect of the time value of money and changes in the
time value of money
‒ The effect of financial risk and changes in financial risk
For contracts measured under the PAA, the main amounts within insurance
finance income or expenses are:
a. Interest accreted on the LIC
b. The effect of changes in interest rates and other
financial assumptions
The Group disaggregates insurance finance income or expenses on motor
insurance contracts issued between Profit or Loss and OCI. The Group has made
an accounting policy choice to disaggregate insurance finance income or
expenses for the period to include within OCI an amount which reflects the
difference between the carrying amount of a group of contracts and the amount
that the group would have been measured at using the discount rates in effect
on initial recognition, effectively reflecting the impact of discount rate
changes on the opening liability for incurred claims through Other
Comprehensive Income. The amount recognised in Other Comprehensive Income over
the duration of a group of contracts will always total zero.
The impact of changes in market interest rates on the value of the insurance
assets and liabilities are reflected in OCI in order to minimise accounting
mismatches between the accounting for financial assets and insurance assets
and liabilities. The Group's financial assets backing the motor insurance
portfolios are predominantly measured at fair value through Other
Comprehensive Income ("FVOCI").
RISK MANAGEMENT
Refer to Notes 3.6 and 3.7 for detail on risks relating to insurance
liabilities and reinsurance assets, and the management thereof.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these Consolidated Financial Statements requires the Group
to select accounting policies and make estimates, assumptions and judgements.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below. The Group based its assumptions
and estimates on information and facts available when the financial statements
were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Group. Such changes are reflected
in the assumptions when they occur. The Group disaggregates information to
disclose major product lines, namely Motor Vehicle, Motorcycle and Taxi.
Accounting judgements
A. Level of aggregation and measurement model for insurance contracts
For measurement purposes, insurance contracts are aggregated into groups based
on an assessment of risks and dividing each portfolio into annual cohorts by
year of issue. Judgement is required in assessing if the contracts have
similar risks that are managed together. Each annual cohort is then divided
into three groups based on the expected profitability of contracts, being
contracts that are onerous on initial recognition, have no significant
possibility of becoming onerous, or any other contracts which do not fall into
those categories. Judgement is applied to determine the profitability of
contracts at initial recognition. The Group applies the default assumption
that no groups of contracts are onerous unless facts and circumstances
indicate otherwise. Further judgement is applied to determine how contracts
will be measured. The Group applies the PAA to simplify the measurement of all
insurance contracts issued and reinsurance contracts held. The judgement
around the PAA has been disclosed in section B(iii) of the Group's accounting
policies for insurance liabilities and reinsurance assets.
B. Insurance acquisition cash flows
IFRS 17 requires an entity to include a portion of its overhead costs that are
directly attributable in fulfilling the obligations under an insurance
contract, in the fulfilment cash flows of the related liability.
The Group applies judgement in determining the inputs used in the methodology
to systematically and rationally allocate insurance acquisition cash flows to
groups of insurance contracts. This includes judgements about the amounts
allocated to insurance contracts expected to arise from renewals of existing
insurance contracts in a group and the volume of expected renewals from new
contracts issued in the period.
At the end of each reporting period, the Group revisits the assumptions made
to allocate insurance acquisition cash flows to groups, and where necessary,
revises the amounts of assets for insurance acquisition cash flows
accordingly.
C. Discount rates
As there are no referenced asset portfolios backing the LIC, because of the
volatility and uncertainty of claims on short-term insurance contracts, the
Group deemed it more appropriate to use the bottom-up approach under IFRS 17
for discounting. This reflects a risk-free yield curve and an illiquidity
premium. The standard does not specify how to calculate the illiquidity
premium.
The Group uses the risk-free curves published by the Bank of England. The
Solvency II GBP risk-free yield curve is based on six-month SONIA swap rates,
corrected using an adjustment defined by the PRA for credit risk. SONIA-based
yield curves are considered to contain negligible credit risk, according to
the Bank of England, as the contracts that make it up settle overnight.
The Group has performed a number of analyses in determining the choice of the
illiquidity risk component, including using the Solvency II volatility
adjustment ("VA"). The analyses did not identify any material differences in
reserves. Given the nature of the liabilities and that there is no penalty or
surrender value to exit the insurance contracts, the Group applied judgement
in setting the illiquidity risk component and has selected the VA to be an
appropriate proxy for the illiquidity adjustment.
Discount rates applied for discounting of future cash flows are listed below:
31 December 2025 31 December 2024
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Motor insurance 3.78% 3.77% 3.91% 4.29% 4.70% 4.39% 4.28% 4.31%
See Note 3.6 for the impact of a 1% increase or decrease in the discount rates
used.
D. Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation that the Group
requires for bearing the uncertainty about the amount and timing of the cash
flows of groups of insurance contracts. The risk adjustment reflects an amount
that an insurer would rationally pay to remove the uncertainty that future
cash flows could exceed the expected value amount.
The Group has estimated the risk adjustment using a methodology which targets
a confidence level (probability of sufficiency) approach between the 80th and
90th percentile. At 31 December 2025, the net risk adjustment applied equates
to an approximate confidence interval of 81.4% (31 December 2024: 80.6%). That
is, the Group has assessed its indifference to uncertainty for all product
lines (as an indication of the compensation that it requires for bearing
non-financial risk) as being equivalent to the 80th to 90th percentile
confidence level less the mean of an estimated probability distribution of the
future cash flows. The Group has estimated the probability distribution of the
future cash flows, and the additional amount above the expected present value
of future cash flows required to meet the target percentiles.
Sabre uses a 'bootstrapping' method to create a distribution of outcomes for
the outstanding claim amounts. This distribution is assessed to calculate the
risk adjustment at a chosen confidence level. Bootstrapping involves taking
random samples of the data for analysis, rather than using the full dataset.
Multiple random samples are selected, with each random sample selected from
the full dataset.
See Note 3.6 for the impact of moving the confidence interval of the booked
risk adjustment up or down by 5ppts.
Critical accounting estimates
E. Liability for incurred claims ("LIC")
The ultimate cost of outstanding claims is estimated by using a range of
standard actuarial claims projection techniques, such as Chain Ladder and
Bornheutter-Ferguson methods.
The main assumption underlying these techniques is that a Group's past claims
development experience can be used to project future claims development and
hence ultimate claims costs. These methods extrapolate the development of paid
and incurred losses, average costs per claim (including claims handling
costs), and claim numbers based on the observed development of earlier years
and expected loss ratios. Historical claims development is mainly analysed by
accident years, but can also be further analysed by geographical area, as well
as by significant business lines and claim types. Large claims are usually
separately addressed, either by being reserved at the face value of loss
adjuster estimates or separately projected in order to reflect their future
development. In most cases, no explicit assumptions are made regarding future
rates of claims inflation or loss ratios. Instead, the assumptions used are
those implicit in the historical claims development data on which the
projections are based. Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future (e.g. to reflect one-off
occurrences, changes in external or market factors such as public attitudes to
claiming, economic conditions, levels of claims inflation, judicial decisions
and legislation, as well as internal factors such as portfolio mix, policy
features and claims handling procedures) in order to arrive at the estimated
ultimate cost of claims that present the probability weighted expected value
outcome from the range of possible outcomes, taking account of all the
uncertainties involved.
The Group has the right to pursue third parties for payment of some or all
costs. Estimates of salvage recoveries and subrogation reimbursements are
considered as an allowance in the measurement of ultimate claims costs. Other
key circumstances affecting the reliability of assumptions include variation
in interest rates and delays in settlement.
The key estimates in calculating the LIC are the amount and timing of future
claims payments in relation to claims already incurred. This is primarily
assessed with reference to past performance, including past settlement
patterns, as per the actuarial methodology outlined above. This includes
estimating the likely changes in inflation as relates to claims already
incurred, as well as the expected frequency of claims which have occurred but
which have not yet been reported. The ongoing cost of handling claims already
incurred is estimated with reference to the historical cost-per-claim
calculated over the past 12 months.
See Note 3.6 for the impact of a 5ppts increase in loss ratio and the impact
of a 5% increase in outstanding claims.
3.1. Composition of the Statement of Financial Position
An analysis of the amounts presented in the Statement of Financial Position
for insurance contracts is included in the table below.
As at December
2025 2024
Notes £'k £'k
Insurance contract liabilities
Insurance contract liabilities
Motor Vehicle insurance 362,019 334,767
Motorcycle insurance 41,200 34,321
Taxi insurance 65,252 37,308
Asset for insurance acquisition cash flows
Motor Vehicle insurance 3.3 (6,184) (6,488)
Motorcycle insurance 3.3 (906) (880)
Taxi insurance 3.3 (699) (1,104)
Total insurance contract liabilities 460,682 397,924
Reinsurance contracts assets
Motor Vehicle insurance 157,554 133,974
Motorcycle insurance 20,469 15,018
Taxi insurance 38,359 11,766
Total reinsurance contract assets 216,382 160,758
3.2. Movements in insurance and reinsurance contract balances
3.2.1. Insurance contracts issued
Reconciliation of liability for remaining coverage and the liability for
incurred claims
In £'k 2025 2024
Liabilities for Remaining Coverage Liabilities for Incurred Claims Total Liabilities for Remaining Coverage Liabilities for Incurred Claims Total
("LRC")
("LIC")
("LRC")
("LIC")
Estimates of present value of future cash flows Risk adjustment for non-financial risk Estimates of present value of future cash flows Risk adjustment for non-financial risk
Opening insurance contract liabilities 69,527 270,440 57,957 397,924 63,008 258,358 53,473 374,839
Insurance revenue (217,990) - - (217,990) (248,131) - - (248,131)
Insurance service expenses 16,753 145,094 12,644 174,491 18,166 132,011 4,484 154,661
Incurred claims and other directly attributable expenses - 143,363 19,157 162,520 - 127,787 14,988 142,775
Changes that relate to past service - changes in the FCF relating to the LIC - 1,731 (6,513) (4,782) - 4,224 (10,504) (6,280)
Amortisation of insurance acquisition cash flows 16,753 - - 16,753 18,166 - - 18,166
Insurance service result (201,237) 145,094 12,644 (43,499) (229,965) 132,011 4,484 (93,470)
Insurance finance expense recognised in Profit or Loss Account - 9,968 - 9,968 - 8,392 - 8,392
Insurance finance expense/(income) recognised in Other Comprehensive Income - 5,808 - 5,808 - (6,852) - (6,852)
Total changes in Comprehensive Income (201,237) 160,870 12,644 (27,723) (229,965) 133,551 4,484 (91,930)
Cash flows
Premiums received 205,082 - - 205,082 254,389 - - 254,389
Claims and other insurance services expenses paid - (98,531) - (98,531) - (121,469) - (121,469)
Insurance acquisition cash flows (16,070) - - (16,070) (17,905) - - (17,905)
Total cash flows 189,012 (98,531) - 90,481 236,484 (121,469) - 115,015
Closing insurance contract liabilities 57,302 332,779 70,601 460,682 69,527 270,440 57,957 397,924
3.2.2. Reinsurance contracts held
Reconciliation of assets for remaining coverage and the assets for incurred
claims
In £'k 2025 2024
Assets for remaining coverage Assets for incurred claims TOTAL Assets for remaining coverage Assets for incurred claims TOTAL
Estimates of present value of future cash flows Risk adjustment for non-financial risk Estimates of present value of future cash flows Risk adjustment for non-financial risk
Opening reinsurance contract assets 3,450 113,655 43,653 160,758 2,075 123,433 41,218 166,726
Net income/(expense) from reinsurance contracts held (23,872) 43,377 11,175 30,680 (33,617) 10,591 2,435 (20,591)
Reinsurance expense (23,872) - - (23,872) (33,617) - - (33,617)
Incurred claims recovery - 33,626 13,785 47,411 - 10,233 9,205 19,438
Changes that relate to past service - 9,751 (2,610) 7,141 - 358 (6,770) (6,412)
Reinsurance finance income recognised in Profit or Loss Account - 4,236 - 4,236 - 3,714 - 3,714
Reinsurance finance income/(expense) recognised in Other Comprehensive Income - 2,856 - 2,856 - (5,880) - (5,880)
Total changes in Comprehensive Income (23,872) 50,469 11,175 37,772 (33,617) 8,425 2,435 (22,757)
Cash flows
Premiums paid 23,924 - - 23,924 34,992 - - 34,992
Recoveries received - (6,072) - (6,072) - (18,203) - (18,203)
Total cash flows 23,924 (6,072) - 17,852 34,992 (18,203) - 16,789
Closing reinsurance contract assets 3,502 158,052 54,828 216,382 3,450 113,655 43,653 160,758
3.3. Assets for insurance acquisition cash flows
£'k
Balance as at 1 January 2024 8,733
Amounts incurred during the year 17,905
Amounts derecognised and included in measurement of insurance contracts (18,166)
Balance as at 31 December 2024 8,472
Amounts incurred during the period 16,070
Amounts derecognised and included in measurement of insurance contracts (16,753)
Balance as at 31 December 2025 7,789
The following table sets out when the Group expects to derecognise assets for
insurance acquisition cash flows after the reporting date:
£'k
31 December 2025
Less than one year 7,733
More than one year 56
7,789
31 December 2024
Less than one year 8,410
More than one year 62
8,472
3.4. Claims development
The presentation of the claims development tables for the Group is based on
the actual date of the event that caused the claim (accident year basis).
These triangles present estimated costs including any risk adjustment and
associated liability related to the future cost of handling claims.
Gross of reinsurance
Accident year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
£'k £'k £'k £'k £'k £'k £'k £'k £'k £'k £'k
Estimates of undiscounted gross cumulative claims
At the end of the accident year 111,518 165,707 120,077 126,981 101,965 89,233 136,811 133,334 146,677 170,463
- One year later 100,935 131,803 108,089 122,663 97,953 93,309 131,433 134,785 135,759
- Two years later 94,294 123,651 107,988 127,225 93,390 90,941 121,909 149,927
- Three years later 91,336 122,674 113,257 131,254 88,192 95,294 126,639
- Four years later 90,789 124,128 118,600 135,173 89,574 96,208
- Five years later 92,629 137,472 125,038 138,777 88,094
- Six years later 101,655 137,660 132,657 138,216
- Seven years later 101,124 135,674 127,866
- Eight years later 102,797 132,393
- Nine years later 102,979
Current estimate of cumulative claims 102,979 132,393 127,866 138,216 88,094 96,208 126,639 149,927 135,759 170,463
Cumulative gross claims paid (94,134) (90,579) (115,385) (112,599) (74,888) (72,990) (86,255) (74,182) (65,303) (43,432)
Undiscounted gross liabilities - accident years from 2016 to 2025 8,845 41,814 12,481 25,617 13,206 23,218 40,384 75,745 70,456 127,031 438,797
Undiscounted gross liabilities - accident years from 2015 and before 35,049
Effect of discounting (70,466)
Total gross liabilities for incurred claims ("LIC") 403,380
Liabilities for remaining coverage ("LRC") 57,302
Total gross liabilities included in the Statement of Financial Position 460,682
The numbers are undiscounted, but otherwise presented on an IFRS 17 basis. The
'boxed' numbers have not been restated under IFRS 17 and reflect the numbers
as previously reported under IFRS 4. The primary difference between the IFRS
17 and IFRS 4 numbers presented here relates to the risk adjustment.
The gross liabilities for incurred claims and gross liabilities for remaining
coverage per product is given below:
LIC LRC Total
Motor Vehicle 306,910 48,925 355,835
Motorcycle 37,004 3,290 40,294
Taxi 59,466 5,087 64,553
Total 403,380 57,302 460,682
Net of reinsurance
Accident year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
£'k £'k £'k £'k £'k £'k £'k £'k £'k £'k £'k
Estimates of undiscounted gross cumulative claims
At the end of the accident year 104,808 106,478 111,433 115,011 85,723 81,161 106,049 102,185 122,858 114,395
- One year later 93,664 96,446 99,649 111,550 81,882 82,487 102,066 99,913 109,912
- Two years later 87,824 91,806 98,641 111,347 80,990 80,146 100,202 105,495
- Three years later 85,243 91,179 99,071 111,342 78,353 80,579 101,099
- Four years later 84,995 88,545 100,893 112,156 78,193 81,590
- Five years later 84,891 92,002 103,254 114,153 77,903
- Six years later 86,784 92,375 103,873 114,361
- Seven years later 86,536 93,897 103,134
- Eight years later 85,464 89,983
- Nine years later 85,237
Current estimate of cumulative claims 85,237 89,983 103,134 114,361 77,903 81,590 101,099 105,495 109,912 114,395
Cumulative gross claims paid (84,330) (85,835) (99,105) (106,529) (72,525) (70,934) (80,808) (71,351) (65,303) (43,432)
Undiscounted gross liabilities - accident years from 2016 to 2025 907 4,148 4,029 7,832 5,378 10,656 20,291 34,144 44,609 70,963 202,957
Undiscounted gross liabilities - accident years from 2015 and before 7,612
Effect of discounting (20,069)
Total gross liabilities for incurred claims ("LIC") 190,500
Liabilities for remaining coverage ("LRC") 53,800
Total gross liabilities included in the Statement of Financial Position 244,300
The numbers are undiscounted, but otherwise presented on an IFRS 17 basis. The
'boxed' numbers have not been restated under IFRS 17 and reflect the numbers
as previously reported under IFRS 4. The primary difference between the IFRS
17 and IFRS 4 numbers presented here relates to the risk adjustment.
The net liabilities for incurred claims and net liabilities for remaining
coverage per product is given below:
LIC LRC Total
Motor Vehicle 152,449 45,837 198,286
Motorcycle 16,707 3,116 19,823
Taxi 21,344 4,847 26,191
Total 190,500 53,800 244,300
3.5. Insurance revenue and expenses - Segmental disclosure
An analysis of insurance revenue, insurance service expenses and net expenses
from reinsurance contracts held is included in the tables below. Additional
information on amounts recognised in Profit or Loss and OCI is included in the
movements in insurance and reinsurance contract balances in Note 3.2.
The Group provides short-term motor insurance to clients, which comprises
three lines of business, Motor Vehicle insurance, Motorcycle insurance and
Taxi insurance, which are written solely in the UK. The Group has no other
lines of business, nor does it operate outside of the UK. Other income relates
to auxiliary products and services, including brokerage and administration
fees, all relating to the motor insurance business. The Group does not have a
single client which accounts for more than 10% of revenue.
2025 2024
Motor Vehicles Motorcycle Taxi Total Motor Vehicles Motorcycle Taxi Total
£'k £'k £'k £'k £'k £'k £'k £'k
Insurance revenue
Insurance revenue from contracts measured under the PAA 193,312 9,454 15,224 217,990 222,635 10,199 15,297 248,131
Total insurance revenue 193,312 9,454 15,224 217,990 222,635 10,199 15,297 248,131
Insurance service expense
Incurred claims and other directly attributable expenses (112,244) (12,319) (37,957) (162,520) (117,752) (6,873) (18,150) (142,775)
Changes that relate to past service - changes in the FCF relating to the LIC 3,800 (93) 1,075 4,782 1,769 188 4,323 6,280
Amortisation of insurance acquisition cash flows (12,679) (2,189) (1,885) (16,753) (14,234) (1,993) (1,939) (18,166)
Total insurance service expense (121,123) (14,601) (38,767) (174,491) (130,217) (8,678) (15,766) (154,661)
Net income/(expense) from reinsurance contracts held
Reinsurance expenses - contracts measured under the PAA (21,133) (1,039) (1,700) (23,872) (30,119) (1,405) (2,093) (33,617)
Incurred claims recovery 15,988 4,185 27,238 47,411 13,223 944 5,271 19,438
Changes that relate to past service - changes in the FCF relating to incurred 6,767 1,829 (1,455) 7,141 (3,803) 262 (2,871) (6,412)
claims recovery
Total net income/(expense) from reinsurance contracts held 1,622 4,975 24,083 30,680 (20,699) (199) 307 (20,591)
Total insurance service result 73,811 (172) 540 74,179 71,719 1,322 (162) 72,879
Other than reinsurance assets and insurance liabilities (see Note 3.1), the
Group does not allocate, monitor or report assets and liabilities per business
line and does not consider the information useful in the day-to-day running of
the Group's operations. The Group also does not allocate, monitor or report
other income and expenses per business line.
3.6. Underwriting risk
The principal risk the Group faces under insurance contracts is that the
actual claims and benefit payments, or the timing thereof, differ from
expectations. This is influenced by the frequency of claims, severity of
claims, actual benefits paid and subsequent development of long-term claims.
Therefore, the objective of the Group is to ensure that sufficient reserves
are available to cover these liabilities.
The Group issues only motor insurance contracts within the UK, which usually
cover a 12-month duration. For these contracts, the most significant risks
arise from severe weather conditions or single catastrophic events. For
longer-tail claims that take some years to settle, there is also inflation
risk.
The above risk exposure is mitigated by diversification across a large
portfolio of policyholders and geographical areas within the UK. The
variability of risks is improved by careful selection and implementation of
underwriting strategies, which are designed to ensure that risks are
diversified in terms of type of risk and level of insured benefits. This is
largely achieved through diversification across policyholders. Furthermore,
strict claim review policies to assess all new and ongoing claims, regular
detailed review of claims handling procedures and frequent investigation of
possible fraudulent claims are all policies and procedures put in place to
reduce the risk exposure of the Group. The Group further enforces a policy of
actively managing and promptly pursuing claims, in order to reduce its
exposure to unpredictable future developments that can negatively impact the
business. Inflation risk is mitigated by taking expected inflation into
account when estimating insurance contract liabilities.
The Group purchases reinsurance as part of its risk mitigation programme.
Reinsurance ceded is placed on a non-proportional basis. This non-proportional
reinsurance is excess-of-loss, designed to mitigate the Group's net exposure
to single large claims or catastrophe losses. The current reinsurance
programme has a retention limit of £1m, with no upper limit. Under this
programme, the Group pays the first £1m of any claim and, from 1 July 2025,
50% of the next £1m (prior to 1 July 2025: 40%). Any amount above £2m, is
covered in full by the panel of reinsurers. All retention levels are subject
to monthly indexation subsequent to the accident date. Amounts recoverable
from reinsurers are estimated in a manner consistent with the outstanding
claims provision and are in accordance with the reinsurance contracts.
Although the Group has reinsurance arrangements, it is not relieved of its
direct obligations to its policyholders and thus a credit exposure exists with
respect to ceded reinsurance, to the extent that any reinsurer is unable to
meet its obligations assumed under such reinsurance agreements. The Group's
placement of reinsurance is diversified such that it is not dependent on a
single reinsurer. There is no single counterparty exposure that exceeds 25% of
total reinsurance assets at the reporting date.
Key assumptions
The principal assumption underlying the liability estimates is that the
Group's future claims development will follow a similar pattern to past claims
development experience. This includes assumptions in respect of average claim
costs, claim handling costs, claim inflation factors and claim numbers for
each accident year. Additional qualitative judgements are used to assess the
extent to which past trends may not apply in the future, for example: one-off
occurrence; changes in market factors such as public attitude to claiming:
economic conditions; and internal factors such as portfolio mix, policy
conditions and claims handling procedures. Judgement is further used to assess
the extent to which external factors such as judicial decisions and government
legislation affect the estimates.
Other key circumstances affecting the reliability of assumptions include
variation in interest rates and delays in settlement.
Sensitivities
The motor claim liabilities are primarily sensitive to the reserving
assumptions noted above. It has not been possible to quantify the sensitivity
of individual, specific assumptions such as legislative changes.
The following analysis is performed for reasonably possible movements in key
assumptions with all other assumptions held constant, showing the impact on
profit after tax and equity. The correlation of assumptions will have a
significant effect in determining the ultimate claims liabilities, but to
demonstrate the impact due to changes in assumptions, assumptions had to be
changed on an individual basis. It should be noted that movements in these
assumptions are non-linear. This sensitivity analysis reflects one-off impacts
at the balance sheet date and should not be interpreted as a forecast.
Gross of reinsurance Net of reinsurance
2025 2025
Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity
£'k £'k £'k £'k £'k £'k
Liability for incurred claims ((1) (2) (3))
Impact of 5% increase in insurance contract liabilities (16,959) - (16,959) (9,500) - (9,500)
Impact of an increase in ultimate loss ratio of 5ppts (25,326) - (25,326) (14,800) - (14,800)
Discount rates
Impact of 1% increase in the discount rates used in calculating present value 1,008 5,564 6,572 178 2,070 2,248
of future expected cash outflows
Impact of 1% decrease in the discount rates used in calculating present value (1,114) (5,907) (7,021) (189) (2,189) (2,378)
of future expected cash outflows
Risk adjustment for non-financial risk
Impact of moving the confidence interval of the booked risk adjustment up by (11,555) - (11,555) (2,626) - (2,626)
5ppts
Impact of moving the confidence interval of the booked risk adjustment down by 8,988 - 8,988 2,233 - 2,233
5ppts
(1) The impact of decreases will have a similar but
opposite impact
(2) Excludes the impact of discounting
(3) A substantial increase in individually large claims
which are over our reinsurance retention limit, generally will have no impact
on profit after tax
Gross of reinsurance Net of reinsurance
2024 2024
Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity
£'k £'k £'k £'k £'k £'k
Liability for incurred claims (1) (2) (3)
Impact of 5% increase in insurance contract liabilities (13,921) - (13,921) (7,902) - (7,902)
Impact of an increase in ultimate loss ratio of 5ppts (22,033) - (22,033) (13,256) - (13,256)
Discount rates
Impact of 1% increase in the discount rates used in calculating present value 783 5,499 6,282 151 2,116 2,267
of future expected cash outflows
Impact of 1% decrease in the discount rates used in calculating present value (882) (6,497) (7,379) (159) (2,445) (2,604)
of future expected cash outflows
Risk adjustment for non-financial risk
Impact of moving the confidence interval of the booked risk adjustment up by (9,018) - (9,018) (2,358) - (2,358)
5ppts
Impact of moving the confidence interval of the booked risk adjustment down by 7,339 - 7,339 2,004 - 2,004
5ppts
(1) The impact of decreases will have a similar but
opposite impact
(2) Excludes the impact of discounting
(3) A substantial increase in individually large claims
which are over our reinsurance retention limit, generally will have no impact
on profit after tax
The 2024 risk adjustment sensitivity impact has been recalculated to reflect
the impact of discounting in line with the impact calculated for 2025.
Climate change
Management has assessed the short-, medium- and long-term risks that result
from climate change. The short-term risk is low. Given the geographical
diversity of the Group's policyholders within the UK and the Group's
reinsurance programme, it is highly unlikely that a climate event will
materially impact the Group's financial position, including its assessment of
the liability for incurred claims. More likely is that the costs associated
with the transition to a low-carbon economy will impact the Group's indemnity
spend in the medium term, as electronic vehicles are currently relatively
expensive to fix. This is somewhat, or perhaps completely, offset by advances
in technology reducing the frequency of claims, in particular bodily injury
claims which are generally far more expensive than damage to vehicles. These
changes in the costs of claims are gradual and, as such, reflected in the
Group's claims experience and fed into the pricing of policies. However, if
the propensity to travel by car decreases overall, this could impact the
Group's income in the long term.
3.7. Insurance-related credit risk
Key insurance-related areas where the Group is exposed to credit default risk
are:
‒ Reinsurers default on their share of the Group's insurance
liabilities
‒ Default on amounts due from insurance contract
intermediaries or policyholders
Sabre uses a large panel of secure reinsurance companies. The credit risk of
reinsurers included in the reinsurance programme is considered annually by
reviewing their credit worthiness. Sabre's largest reinsurance counterparty is
Munich Re. The credit risk exposure is further monitored throughout the year
to ensure that changes in credit risk positions are adequately addressed.
The following tables demonstrate the Group's exposure to credit risk in
respect of overdue insurance debt and counterparty creditworthiness.
Overdue insurance-related debt
Neither past due nor impaired Past due 1-90 days Past due more than 90 days Assets that have been impaired Carrying value in the balance sheet
At 31 December 2025 £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) 266,781 - - - 266,781
Insurance receivables (2) 42,708 81 68 - 42,857
Total 309,489 81 68 - 309,638
Neither past due nor impaired Past due 1-90 days Past due more than 90 days Assets that have been impaired Carrying value in the balance sheet
At 31 December 2024 £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) 202,231 - - - 202,231
Insurance receivables (2) 41,755 22 - - 41,777
Total 243,986 22 - - 244,008
(1) Undiscounted
(2) Included within 'Insurance contract liabilities'
Exposure by credit rating
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) - 130,186 136,595 - - - 266,781
Insurance receivables (2) - - - - - 42,857 42,857
Total - 130,186 136,595 - - 42,857 309,638
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) - 102,138 100,093 - - - 202,231
Insurance receivables (2) - - - - - 41,777 41,777
Total - 102,138 100,093 - - 41,777 244,008
(1) Undiscounted
(2) Included within 'Insurance contract liabilities'
3.8. Net financial result
2025 2024
Insurance Non-insurance related Total Insurance Non-insurance related Total
related
related
Notes £'k £'k £'k £'k £'k £'k
Investment income
Interest income on financial assets using effective interest rate method 4.5 10,816 903 11,719 7,501 425 7,926
Realised gains on derecognition of debt securities measured at FVOCI 4.6 7 - 7 - - -
Amounts recognised in OCI 4.6 5,518 - 5,518 3,774 - 3,774
Total investment income 16,341 903 17,244 11,275 425 11,700
Insurance finance expense from insurance contracts held
Interest accreted (9,968) - (9,968) (8,392) - (8,392)
Effect of changes in interest rates and other financial assumptions (5,808) - (5,808) 6,852 - 6,852
(15,776) - (15,776) (1,540) - (1,540)
Reinsurance finance income/(expense) from reinsurance contracts held
Interest accreted 4,236 - 4,236 3,714 - 3,714
Effect of changes in interest rates and other financial assumptions 2,856 - 2,856 (5,880) - (5,880)
7,092 - 7,092 (2,166) - (2,166)
Net insurance finance expense (8,684) - (8,684) (3,706) - (3,706)
Net financial results 7,657 903 8,560 7,569 425 7,994
Represented by:
Amounts recognised in Profit or Loss 5,091 903 5,994 2,823 425 3,248
Amounts recognised in OCI 2,566 - 2,566 4,746 - 4,746
Total 7,657 903 8,560 7,569 425 7,994
4. FINANCIAL ASSETS
RISK MANAGEMENT
Refer to the following notes for detail on risks relating to financial assets:
Investment concentration risk - Note 4.2.1
Interest rate risk - Note 4.2.2
Credit risk - Note 4.4
Liquidity risk - Note 6
The Group's financial assets are summarised below:
2025 2024
Notes £'k £'k
Cash and cash equivalents 4.1 25,475 31,314
Debt securities held at fair value through Other Comprehensive Income 4.2 325,752 311,184
Receivables 4.3 41 32
Total 351,268 342,530
4.1. Cash and cash equivalents
ACCOUNTING POLICY - CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held on call with
banks and money market funds. Cash and cash equivalents are carried at
amortised cost.
2025 2024
£'k £'k
Cash at bank and on hand 14,823 18,174
Money market funds 10,652 13,140
Total 25,475 31,314
Cash held in money market funds has no notice period for withdrawal.
The carrying value of cash and cash equivalents approximates fair value. The
full value is expected to be realised within 12 months.
4.2. Debt securities held at fair value through Other Comprehensive Income
ACCOUNTING POLICY - FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Classification
The Group classifies the following financial assets at fair value through
Other Comprehensive Income ("FVOCI"):
‒ Debt securities
A debt instrument is measured at FVOCI only if it meets both of the following
conditions and is not designated at fair value through the Profit or Loss
Account ("FVTPL"):
‒ The asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling
financial assets
‒ The contractual terms of the financial asset give rise to
cash flows that are solely payments of principal and interest ("SPPI") on the
principal amount outstanding on specified dates
Recognition and measurement
At initial recognition, the Group measures debt securities through Other
Comprehensive Income at fair value, plus the transaction costs that are
directly attributable to the acquisition of the financial asset. Debt
securities at FVOCI are subsequently measured at fair value.
Impairment
At each reporting date, the Group assesses debt securities at FVOCI for
impairment. Under IFRS 9, a 'three-stage' model for calculating the expected
credit losses ("ECL") is used, and is based on changes in credit quality since
initial recognition. Refer to Note 4.4.
The Group's debt securities held at fair value through Other Comprehensive
Income are summarised below:
2025 2024
£'k % holdings £'k % holdings
Government bonds 124,798 38.3% 112,793 36.2%
Government-backed securities 100,717 30.9% 103,267 33.2%
Corporate bonds 100,237 30.8% 95,124 30.6%
Total 325,752 100.0% 311,184 100.0%
4.2.1. Investment concentration risk
Excessive exposure to particular industry sectors or groups can give rise to
concentration risk. The Group has no significant investment concentration in
any particular industrial sector and therefore is unlikely to suffer
significant losses through its investment portfolio as a result of
over-exposure to sectors engaged in similar activities or which have similar
economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic, political or
other conditions.
A significant part of the Group's investment portfolio consists primarily of
UK government bonds and government-backed bonds; therefore, the risk of
government default does exist, however, the likelihood is extremely remote.
The remainder of the portfolio consists of investment grade corporate bonds.
The Group continues to monitor the strength and security of all bonds. The
Group does not have direct exposure to Ukrainian and Russian assets.
The Group's exposure by geographical area is outlined below:
Government bonds Government-backed securities Corporate bonds Total
At 31 December 2025 £'k £'k £'k £'k % holdings
United Kingdom 124,798 3,102 25,611 153,511 47.1%
Europe - 61,744 44,371 106,115 32.6%
Northern America - 25,265 23,112 48,377 14.9%
Oceania - - 5,018 5,018 1.5%
Asia - 10,606 2,125 12,731 3.9%
Total 124,798 100,717 100,237 325,752 100.0%
Government bonds Government-backed securities Corporate bonds Total
At 31 December 2024 £'k £'k £'k £'k % holdings
United Kingdom 112,793 3,038 31,187 147,018 47.2%
Europe - 59,277 37,002 96,279 30.9%
Northern America - 25,761 19,863 45,624 14.7%
Oceania - - 4,973 4,973 1.6%
Asia - 15,191 2,099 17,290 5.6%
Total 112,793 103,267 95,124 311,184 100.0%
The Group's exposure by investment type for government-backed securities and
corporate bonds is outlined below:
Agency Supranational Total
At 31 December 2025 £'k £'k £'k
Government-backed securities 38,044 62,673 100,717
%of holdings 37.8% 62.2% 100.0%
Financial Industrial Utilities Total
At 31 December 2025 £'k £'k £'k £'k
Corporate bonds 55,765 34,235 10,237 100,237
%of holdings 55.6% 34.2% 10.2% 100.0%
Agency Supranational Total
At 31 December 2024 £'k £'k £'k
Government-backed securities 43,921 59,346 103,267
%of holdings 42.5% 57.5% 100.0%
Financial Industrial Utilities Total
At 31 December 2024 £'k £'k £'k £'k
Corporate bonds 51,698 38,873 4,553 95,124
%of holdings 54.3% 40.9% 4.8% 100.0%
4.2.2. Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. Floating rate instruments expose the Group to cash flow interest risk,
whereas fixed interest rate instruments expose the Group to fair value
interest risk.
The Group's interest risk policy requires it to manage the maturities of
interest-bearing financial assets and interest-bearing financial liabilities.
Interest on fixed interest rate instruments is priced at inception of the
financial instrument and is fixed until maturity.
The Group has a concentration of interest rate risk in UK government bonds and
other fixed-income securities.
The analysis that follows is performed for reasonably possible movements in
key variables with all other variables held constant, showing the impact on
profit before tax and equity. The correlation of variables will have a
significant effect in determining the ultimate impact on interest rate risk,
but to demonstrate the impact due to changes in variables, variables had to be
changed on an individual basis. It should be noted that movements in these
variables are non-linear.
The impact of any movement in market values, such as those caused by changes
in interest rates, is taken through Other Comprehensive Income and has no
impact on profit after tax.
Decrease in profit after tax Decrease in total equity
2025 2024 2025 2024
At 31 December £'k £'k £'k £'k
Interest rate
Impact of a 100-basis point increase in interest rates on debt securities at - - (3,378) (3,250)
FVOCI
Impact of a 200-basis point increase in interest rates on debt securities at - - (6,755) (6,499)
FVOCI
4.2.3. Fair value
ACCOUNTING POLICY
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, or in its absence, the most advantageous market to which
the Group has access at that date.
The Group measures the fair value of an instrument using the quoted bid price
in an active market for that instrument. A market is regarded as active if
transactions for the asset take place with sufficient frequency and volume to
provide pricing information on an ongoing basis.
The fair value of financial instruments traded in active markets is based on
quoted market prices at the Statement of Financial Position date.
A market is regarded as active if quoted prices are readily and regularly
available from the stock exchange or pricing service, and those prices
represent actual and regularly occurring market transactions on an arm's
length basis. The quoted market price used for financial assets held by the
Group is the closing bid price.
Fair value measurements are based on observable and unobservable inputs.
Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect the Group's view of market assumptions in the
absence of observable market information.
IFRS 13 requires certain disclosures which require the classification of
financial assets and financial liabilities measured at fair value using a fair
value hierarchy that reflects the significance of the inputs used in making
the fair value measurement.
Disclosure of fair value measurements by level is according to the following
fair value measurement hierarchy:
‒ Level 1: fair value is based on quoted market prices
(unadjusted) in active markets for identical instruments as measured on
reporting date
‒ Level 2: fair value is determined through inputs, other
than quoted prices included in Level 1 that are observable for the assets and
liabilities, either directly (prices) or indirectly (derived from prices)
‒ Level 3: fair value is determined through valuation
techniques which use significant unobservable inputs
Level 1
The fair value of financial instruments traded in active markets is based on
quoted market prices at the Statement of Financial Position date.
A market is regarded as active if quoted prices are readily and regularly
available from the stock exchange or pricing service, and those prices
represent actual and regularly occurring market transactions on an arm's
length basis. The quoted market price used for financial assets held by the
Group is the closing bid price. These instruments are included in Level 1 and
comprise only debt securities classified as fair value through Other
Comprehensive Income.
Level 2
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rely as
little as possible on entity-specific estimates. If all significant input
required to fair value an instrument is observable, the instrument is included
in Level 2. The Group has no Level 2 financial instruments.
Level 3
If one or more of the significant inputs are not based on observable market
data, the instrument is included in Level 3. The Group has no Level 3
financial instruments.
The following table summarises the classification of financial instruments:
Level 1 Level 2 Level 3 Total
At 31 December 2025 £'k £'k £'k £'k
Assets held at fair value
Debt securities held at FVOCI 325,752 - - 325,752
Total 325,752 - - 325,752
Level 1 Level 2 Level 3 Total
At 31 December 2024 £'k £'k £'k £'k
Assets held at fair value
Total 311,184 - - 311,184
Debt securities held at FVOCI 311,184 - - 311,184
Transfers between levels
There have been no transfers between levels during the year (2024: no
transfers).
4.3. Receivables
ACCOUNTING POLICY
Classification
The Group classifies its receivables as at amortised cost only if both of the
following criteria are met:
‒ The asset is held within a business model whose objective
is to collect the contractual cash flows
‒ The contractual terms give rise to cash flows that are
solely payments of principal and interest
Recognition and measurement
Receivables are initially recognised at fair value and subsequently measured
at amortised cost using the effective interest method, less provision for
expected credit losses.
Impairment
The Group measures loss allowances at an amount equal to lifetime ECL. To
measure the expected credit losses, receivables have been grouped based on
shared credit risk characteristics and the days past due to create the
categories, namely, performing, underperforming and not performing. The
expected loss rates are based on the payment profiles of receivables over a
period of 36 months before year end. The loss rates are adjusted to reflect
current and forward-looking information on macro-economic factors, such as the
socio-economic environment affecting the ability of the debtors to settle the
receivables. Receivables that are 30 days or more past due are considered to
be 'not performing' and the default rebuttable presumption of 90 days
prescribed by IFRS 9 is not applied.
Performing
Customers have a low risk of default and a strong capacity to meet contractual
cash flows.
Underperforming
Receivables for which there is a significant increase in credit risk. A
significant increase in credit risk is presumed if interest and/or principal
repayments are past due.
Not performing
Interest and/or principal repayments are 30 days past due.
The Group's receivables comprise:
2025 2024
£'k £'k
Other debtors 41 32
Total 41 32
The estimated fair values of receivables are the discounted amounts of the
estimated future cash flows expected to be received.
The carrying value of receivables approximates fair value. The provision for
expected credit losses is based on the recoverability of the individual
receivables.
The Group calculated ECL on receivables and has concluded that it is wholly
immaterial and such further disclosure has not been included.
4.4. Credit risk
ACCOUNTING POLICY
Impairment of financial assets
At each reporting date, the Group assesses financial assets measured at
amortised cost and debt securities at FVOCI for impairment. Under IFRS 9, a
'three-stage' model for calculating expected credit losses ("ECL") is used,
and is based on changes in credit quality since initial recognition as
summarised below:
Performing financial assets
‒ Stage 1: From initial recognition of a financial asset to the
date on which an asset has experienced a significant increase in credit risk
relative to its initial recognition, a stage 1 loss allowance is recognised
equal to the credit losses expected to result from its default occurring over
the earlier of the next 12 months or its maturity date ("12-month ECL").
‒ Stage 2: Following a significant increase in credit risk
relative to the initial recognition of the financial asset, a stage 2 loss
allowance is recognised equal to the credit losses expected from all possible
default events over the remaining lifetime of the asset ("Lifetime ECL"). The
assessment of whether there has been a significant increase in credit risk,
such as an actual or significant change in instruments' external credit
rating; significant widening of credit spread; changes in rates or terms of
instrument; existing or forecast adverse change in business, financial or
economic conditions that are expected to cause a significant change in the
counterparty's ability to meet its debt obligations; requires considerable
judgement, based on the lifetime probability of default ("PD"). Stage 1 and 2
allowances are held against performing loans; the main difference between
stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are
estimated using the PD with a maximum period of 12 months, while stage 2
allowances are estimated using the PD over the remaining lifetime of the
asset.
Impaired financial assets
‒ Stage 3: When a financial asset is considered to be
credit-impaired, the allowance for credit losses ("ACL") continues to
represent lifetime expected credit losses; however, interest income is
calculated based on the amortised cost of the asset, net of the loss
allowance, rather than its gross carrying amount.
Application of the impairment model
The Group applies IFRS 9's ECL model to two main types of financial assets
that are measured at amortised cost or FVOCI:
‒ Other receivables, to which the simplified approach
prescribed by IFRS 9 is applied. This approach requires the recognition of a
lifetime ECL allowance on day one.
‒ Debt securities, to which the general three-stage model
(described above) is applied, whereby a 12-month ECL is recognised initially
and the balance is monitored for significant increases in credit risk which
triggers the recognition of a lifetime ECL allowance.
ECLs are a probability-weighted estimate of credit losses. The probability is
determined by the estimated risk of default which is applied to the cash flow
estimates. On a significant increase in credit risk, from investment grade to
non-investment grade, allowances are recognised without a change in the
expected cash flows (although typically expected cash flows do also change)
and expected credit losses are rebased from 12-month to lifetime expectations.
The measurement of ECLs considers information about past events and current
conditions, as well as supportable information about future events and
economic conditions.
Presentation of impairment
Loss allowances for financial assets measured at amortised cost are deducted
from the gross carrying amount of the assets. For debt securities at FVOCI,
the loss allowance is recognised in the Profit or Loss Account and accounted
for as a transfer from OCI to Profit or Loss, instead of reducing the carrying
amount of the asset.
Write-offs
Loans and debt securities are written off (either partially or in full) when
there is no realistic prospect of the amount being recovered. This is
generally the case when the Group concludes that the borrower does not have
assets or sources of income that could generate sufficient cash flows to repay
the amounts subject to the write-off.
Exposure by credit rating
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
UK government bonds - 124,798 - - - - 124,798
Government-backed securities 100,717 - - - - - 100,717
Corporate bonds 1,125 21,008 53,754 24,350 - - 100,237
Receivables - - - - - 41 41
Cash and cash equivalents 10,652 51 14,772 - - - 25,475
Total 112,494 145,857 68,526 24,350 - 41 351,268
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
UK government bonds - 112,793 - - - - 112,793
Government-backed securities 98,963 4,304 - - - - 103,267
Corporate bonds 1,127 20,050 57,270 16,677 - - 95,124
Receivables - - - - - 32 32
Cash and cash equivalents 13,140 51 18,123 - - - 31,314
Total 113,230 137,198 75,393 16,677 - 32 342,530
With the exception of receivables, all the Group's financial assets are
investment grade (AAA to BBB).
Analysis of credit risk and allowance for ECL
The following table provides an overview of the allowance for ECL provided for
on the types of financial assets held by the Group where credit risk is
prevalent.
Gross carrying amount Allowance for ECL Net amount
At 31 December 2025 £'k £'k £'k
Government bonds 124,798 (3) 124,795
Government-backed securities 100,717 (4) 100,713
Corporate bonds 100,237 (38) 100,199
Receivables 41 - 41
Cash and cash equivalents 25,475 - 25,475
Total 351,268 (45) 351,223
Gross carrying amount Allowance for ECL Net amount
At 31 December 2024 £'k £'k £'k
Government bonds 112,793 (3) 112,790
Government-backed securities 103,267 (4) 103,263
Corporate bonds 95,124 (35) 95,089
Receivables 32 - 32
Cash and cash equivalents 31,314 - 31,314
Total 342,530 (42) 342,488
4.5. Investment income
ACCOUNTING POLICY
Investment income from debt instruments classified as FVOCI are measured using
the effective interest rate which allocates the interest income or interest
expense over the expected life of the asset or liability at the rate that
exactly discounts all estimated future cash flows to equal the instrument's
initial carrying amount. Calculation of the effective interest rate takes into
account fees payable or receivable that are an integral part of the
instrument's yield, premiums or discounts on acquisition or issue, early
redemption fees and transaction costs. All contractual terms of a financial
instrument are considered when estimating future cash flows.
2025 2024
£'k £'k
Interest income on financial assets using effective interest rate method
Interest income from debt securities 10,582 6,458
Interest income from cash and cash equivalents 1,137 1,468
Total 11,719 7,926
4.6. Net gains/(losses) from fair value adjustments on financial assets
ACCOUNTING POLICY
Movements in the fair value of debt instruments classified as FVOCI are taken
through OCI. When the instruments are derecognised, the cumulative gain or
losses previously recognised in OCI is reclassified to Profit or Loss.
2025 2024
£'k £'k
Profit or Loss
Realised gains on derecognition of debt securities measured at FVOCI 7 -
Realised fair value gains on debt securities reclassified to Profit or Loss 7 -
Other Comprehensive Income
Unrealised fair value gains on debt securities 5,522 3,769
Realised gains on derecognition of debt securities reclassified to Profit or (7) -
Loss
Expected credit loss 3 5
Unrealised fair value gains on debt securities through Other Comprehensive 5,518 3,774
Income
Net gains from fair value adjustments on financial assets 5,525 3,774
5. PAYABLES
ACCOUNTING POLICY
Payables are recognised when the Group has a contractual obligation to deliver
cash or another financial asset to another entity, or a contractual obligation
to exchange financial assets or financial liabilities with another entity
under conditions that are potentially unfavourable to the entity. Payables are
carried at amortised cost.
2025 2024
£'k £'k
Trade and other creditors 894 951
Other taxes 6,154 6,044
Total 7,048 6,995
6. LIQUIDITY RISK
Liquidity risk is the potential that obligations cannot be met as they fall
due as a consequence of having a timing mismatch or inability to raise
sufficient liquid assets without suffering a substantial loss on realisation.
The Group manages its liquidity risk through both ensuring that it holds
sufficient cash and cash equivalent assets to meet all short-term liabilities
and matching, as far as possible, the maturity profile of its financial
investments to the expected cash outflows.
The following table analyses the carrying value of cash and cash equivalents
and financial assets, by contractual maturity, which can fund the repayment of
liabilities as they crystallise. It also analyses the undiscounted cash flows
of reinsurance contract assets held, based on the future expected cash flows
to be received in the periods presented.
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
Cash and cash equivalents (1) 25,475 - - - - - 25,475
UK government bonds 38,613 23,451 34,780 19,864 - 8,090 124,798
Government-backed securities 47,100 13,271 14,471 13,464 8,629 3,782 100,717
Corporate bonds 18,931 13,660 30,699 20,175 9,509 7,263 100,237
Receivables 41 - - - - - 41
Reinsurance contract assets 65,594 44,008 36,876 27,018 21,115 72,170 266,781
Total 195,754 94,390 116,826 80,521 39,253 91,305 618,049
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
Cash and cash equivalents (1) 31,314 - - - - - 31,314
UK government bonds 11,810 32,790 19,855 30,628 17,710 - 112,793
Government-backed securities 39,740 38,861 7,929 6,034 10,703 - 103,267
Corporate bonds 37,546 20,366 11,347 19,091 6,230 544 95,124
Receivables 32 - - - - - 32
Reinsurance contract assets 56,652 31,084 18,558 19,662 15,631 60,644 202,231
Total 177,094 123,101 57,689 75,415 50,274 61,188 544,761
(1) Includes money market funds with no notice period for withdrawal
The following table analyses the undiscounted cash flows of insurance
liabilities based on the future cash flows expected to be paid out in the
periods presented, and payables by maturity dates.
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
Payables 7,048 - - - - - 7,048
Insurance contract liabilities ((2)) 101,733 90,478 66,812 46,492 30,264 89,773 425,552
Total 108,781 90,478 66,812 46,492 30,264 89,773 432,600
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
Payables 6,995 - - - - - 6,995
Insurance contract liabilities ((2)) 88,992 74,407 42,761 34,427 25,261 77,787 343,635
Total 95,987 74,407 42,761 34,427 25,261 77,787 350,630
(2) Excludes the liability for remaining coverage (unearned premium element)
and effect of discounting
Management has considered the liquidity and cash generation of the Group and
is satisfied that the Group will be able to meet all liabilities as they fall
due.
7. OTHER INCOME
ACCOUNTING POLICY
Other income consists of brokerage fees resulting from the sale of ancillary
products connected to the Group's direct business, and other non-insurance
income such as administrative fees charged on direct business. Such income is
recognised once the related service has been performed. Typically, this will
be at the point of sale of the product.
2025 2024
£'k £'k
Administration fees 314 182
Brokerage and other fee income 323 558
Total 637 740
Brokerage and other fee income relates to auxiliary products and services.
8. OTHER OPERATING EXPENSES
2025 2024
Notes £'k £'k
Employee expenses 8.1 18,161 15,426
Property expenses 503 500
IT expense, including IT depreciation 6,934 6,756
Other depreciation 113 113
Industry levies 5,670 5,994
Policy servicing costs 2,132 3,153
Other operating expenses 3,505 3,399
Movement in expected credit loss on debt securities 3 5
Before adjustment for directly attributable claims expenses 37,021 35,346
Adjusted for:
Reclassification of directly attributable claims expenses (7,171) (7,041)
Total operating expenses 29,850 28,305
8.1. Employee expenses
ACCOUNTING POLICY
A. Pensions
For staff who were employees on 8 February 2002, the Group operates a
non-contributory defined contribution Group personal pension scheme. The
contribution by the Group depends on the age of the employee.
For employees joining since 8 February 2002, the Group operates a matched
contribution Group personal pension scheme where the Group contributes an
amount matching the contribution made by the employee.
Contributions to defined contribution schemes are recognised in the Profit or
Loss Account in the period in which they become payable.
B. Share-based payments
The fair value of equity instruments granted under share‑based payment plans
are recognised as an expense and spread over the vesting period of the
instrument. The total amount to be expensed is determined by reference to the
fair value of the awards made at the grant date, excluding the impact of any
non‑market vesting conditions. Depending on the plan, the fair value of
equity instruments granted is measured on grant date using an appropriate
valuation model or the market price on grant date. At the date of each
Statement of Financial Position, the Group revises its estimate of the number
of equity instruments that are expected to become exercisable. It recognises
the impact of the revision of original estimates, if any, in the Profit or
Loss Account, and a corresponding adjustment is made to equity over the
remaining vesting period. The fair value of the awards and ultimate expense
are not adjusted on a change in market vesting conditions during the vesting
period.
C. Leave pay
Employee entitlement to annual leave is recognised when it accrues to
employees. An accrual is made for the estimated liability for annual leave as
a result of services rendered by employees up to the Statement of Financial
Position date.
The aggregate remuneration of those employed by the Group's operations
comprised:
2025 2024
£'k £'k
Wages and salaries 12,956 11,332
Social security expenses 1,937 1,464
Contributions to defined contribution plans 615 598
Equity-settled share-based payment 2,142 1,607
Other employee expenses 511 425
Before adjustment for directly attributable claims expenses 18,161 15,426
Adjusted for:
Reclassification of directly attributable claims expenses (5,199) (4,799)
Employee expenses 12,962 10,627
8.2. Number of employees
The table below analyses the average monthly number of persons employed by the
Group's operations.
2025 2024
Operations 139 134
Support 34 31
Total 173 165
8.3. Directors' remuneration
Amounts paid to Directors are disclosed within the Annual Report on Directors'
Remuneration on pages 107 to 120 of the 2026 Annual Report and Accounts.
8.4. Auditor's remuneration
The table below analyses the Auditor's remuneration in respect of the Group's
operations.
2025 2024
£'k £'k
Audit of these financial statements 213 205
Audit of financial statements of subsidiaries of the Group 248 253
Total audit fees 461 458
Fees for non-audit services - Audit-related assurance services 89 89
Total non-audit fees 89 89
Total Auditor's remuneration 550 547
The above fees exclude irrecoverable VAT of 20%.
9. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of owned and leased assets that do not
meet the definition of investment property.
2025 2024
£'k £'k
Owner-occupied property 3,600 3,600
Office equipment 442 539
IT equipment 236 65
Total 4,278 4,204
ACCOUNTING POLICY
A. Owner-occupied property
Owner-occupied properties are held by the Group for use in the supply of
services or, for its own administration purposes.
Owner-occupied property is held at fair value. Increases in the carrying
amount of owner-occupied properties as a result of revaluations are credited
to Other Comprehensive Income and accumulated in a revaluation reserve in
equity. To the extent that a revaluation increase reverses a revaluation
decrease that was previously recognised as an expense in Profit or Loss, such
increase is credited to income in Profit or Loss. Decreases in valuation are
charged to Profit or Loss, except to the extent that a decrease reverses the
existing accumulated revaluation reserve and therefore such a decrease is
recognised in Other Comprehensive Income.
A fair value assessment of the owner-occupied property is undertaken at each
reporting date with any material changes in fair value recognised. Valuation
is at highest and best use. Owner-occupied property is also revalued by an
external qualified surveyor, at least every three years. UK properties do not
have frequent and volatile fair value changes and, as such, more frequent
revaluations are considered unnecessary, as only insignificant changes in fair
value is expected.
Owner-occupied land is not depreciated. As the depreciation of owner-occupied
buildings is immaterial and properties are revalued every three years by an
external qualified surveyor, no depreciation is charged on owner-occupied
buildings.
B. Office and IT equipment
Office and IT equipment are stated at historical cost less accumulated
depreciation and impairment charges. Historical cost includes expenditure that
is directly attributable to the acquisition of property and equipment.
Depreciation is calculated on the difference between the cost and residual
value of the asset and is charged to the Profit or Loss Account over the
estimated useful life of each significant part of an item of fixtures,
fittings and IT equipment, using the straight-line basis.
Estimated useful lives are as follows:
Office equipment 3 to 10 years
IT equipment 3 to 5 years
The assets' residual values and useful lives are reviewed at each Statement of
Financial Position date and adjusted if appropriate. An asset's carrying
amount is written down to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount. Gains and losses on
disposals are determined by comparing the proceeds with the carrying amount of
the assets and are included in Profit or Loss before tax.
Repairs and maintenance costs are charged to the Profit or Loss Account during
the financial year in which they are incurred. The cost of major renovations
is included in the carrying amount of the asset when it is probable that
future economic benefits from the renovations will flow to the Group.
Owner- occupied Office equipment IT equipment Total
£'k £'k £'k £'k
Cost/Valuation
At 1 January 2025 4,358 720 487 5,565
Additions/Improvements - 16 237 253
Disposals - - - -
Revaluation - - - -
At 31 December 2025 4,358 736 724 5,818
Accumulated depreciation and impairment
At 1 January 2025 758 181 422 1,361
Depreciation charge for the year - 113 66 179
Disposals - - - -
Impairment losses on revaluation - - - -
At 31 December 2025 758 294 488 1,540
Carrying amount
At 31 December 2025 3,600 442 236 4,278
Owner- occupied Office equipment IT equipment Total
£'k £'k £'k £'k
Cost/Valuation
At 1 January 2024 4,358 720 487 5,565
Additions/Improvements - - - -
Disposals - - - -
Revaluation - - - -
At 31 December 2024 4,358 720 487 5,565
Accumulated depreciation and impairment
At 1 January 2024 758 68 351 1,177
Depreciation charge for the year - 113 71 184
Disposals - - - -
Impairment losses on revaluation - - - -
At 31 December 2024 758 181 422 1,361
Carrying amount
At 31 December 2024 3,600 539 65 4,204
The Group holds two owner-occupied properties, Sabre House and The Old House,
which are both managed by the Group. In accordance with the Group's accounting
policies, owner-occupied buildings are not depreciated. The properties are
measured at fair value which is arrived at on the basis of a valuation carried
out on 16 October 2023 by Hurst Warne and Partners LLP. The valuation was
carried out on an open-market basis in accordance with the Royal Institution
of Chartered Surveyors' requirements, which is deemed to equate to fair value.
While transaction evidence underpins the valuation process, the definition of
market value, including the commentary, in practice requires the valuer to
reflect the realities of the current market. In this context valuers must use
their market knowledge and professional judgement and not rely only upon
historical market sentiment based on historical transactional comparables.
The fair value of the owner-occupied properties was derived using the
investment method supported by comparable evidence. The significant
non-observable inputs used in the valuations are the expected rental values
per square foot and the capitalisation rates. The fair value of the
owner-occupied properties valuation would increase (decrease) if the expected
rental values per square foot were to be higher (lower) and the capitalisation
rates were to be lower (higher).
The fair value measurement of owner-occupied properties of £3,600k (2024:
£3,600k) has been categorised as a Level 3 fair value based on the
non-observable inputs to the valuation technique used.
The following table shows reconciliation to the closing fair value for the
Level 3 owner-occupied property at valuation:
2025 2024
£'k £'k
At 1 January 3,600 3,600
Additions/Improvements - -
Revaluation losses - -
Impairment losses - -
At 31 December 3,600 3,600
The fair value of owner-occupied properties includes a revaluation reserve of
£NIL (2024: £NIL) (excluding tax impact) and is not distributable.
Revaluation losses are charged against the related revaluation reserve to the
extent that the decrease does not exceed the amount held in the revaluation
surplus in respect of the same asset. Any additional losses are charged as an
impairment loss in the Profit or Loss Account. Reversal of such impairment
losses in future periods will be credited to the Profit or Loss Account to the
extent losses were previously charged to the Profit or Loss Account.
The table below shows the impact a 15% decrease in property prices will have
on the Group's profit after tax and equity:
Decrease in profit after tax Decrease In total equity
2025 2024 2025 2024
£'k £'k £'k £'k
Owner-occupied property
Impact of a 15% decrease in property prices (405) (405) (405) (405)
Historical cost model values
If owner-occupied properties were carried under the cost model (historical
costs, less accumulated depreciation and impairment losses), the value of
owner-occupied properties in the balance sheet would have been £3,174k (2024:
£3,229k).
10. INCOME TAX EXPENSE
ACCOUNTING POLICY
The income tax expense in the Profit or Loss Account is based on the taxable
profits for the year. It is Group policy to relieve profits where possible by
the surrender of losses from Group companies with payment for value.
2025 2024
£'k £'k
Current taxation
Charge for the year 13,366 12,157
Charge relating to prior periods 139 570
13,505 12,727
Deferred taxation (Note 11)
Origination and reversal of temporary differences (460) (126)
(460) (126)
Current taxation 13,505 12,727
Deferred taxation (Note 11) (460) (126)
Income tax expense 13,045 12,601
Tax recorded in Other Comprehensive Income is as follows:
2025 2024
£'k £'k
Current taxation - -
Deferred taxation 643 549
643 549
The actual income tax expense differs from the expected income tax expense
computed by applying the standard rate of UK corporation tax of 25.0% (2024:
25.0%) as follows:
2025 2024
£'k £'k
Profit before tax 50,960 48,562
Expected income tax expense 12,740 12,141
Effect of:
Expenses not deductible for tax purposes 14 (86)
Adjustment in respect of prior periods 139 570
Other income tax adjustments 152 (24)
Income tax expense for the year 13,045 12,601
Effective income tax rate 25.6% 25.9%
11. DEFERRED TAX
ACCOUNTING POLICY
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay
more, or a right to pay less or to receive more, tax, with the following
exception.
Deferred tax assets are recognised only to the extent that the Directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences
can be deducted.
Provisions and other temporary differences Depreciation in excess of capital allowances Share-based payments Fair value movements in debt securities at FVOCI Movement in insurance finance reserve Total
£'k £'k £'k £'k £'k £'k
At 1 January 2024 - (180) 468 1,996 (1,596) 688
(Debit)/Credit to the Profit or Loss - 43 88 (5) - 126
(Debit)/Credit to Other Comprehensive Income - - - (944) 395 (549)
At 31 December 2024 - (137) 556 1,047 (1,201) 265
(Debit)/Credit to the Profit or Loss 197 (21) 290 (6) - 460
(Debit)/Credit to Other Comprehensive Income - - - (1,381) 738 (643)
At 31 December 2025 197 (158) 846 (340) (463) 82
2025 2024
£'k £'k
Per Statement of Financial Position:
Deferred tax assets 1,043 1,603
Deferred tax liabilities (961) (1,338)
82 265
12. DIVIDENDS
ACCOUNTING POLICY
Dividend distribution to the Group's shareholders is recognised as a liability
in the Group's financial statements in the period in which the dividend is
approved.
2025 2024
pence per share £'k pence per share £'k
Amounts recognised as distributions to equity holders in the period
Interim dividend for the current year 3.4 8,347 1.7 4,227
Final dividend for the prior year 11.3 27,991 8.1 20,122
14.7 36,338 9.8 24,349
Proposed dividends
Final dividend ((1)) 10.1 24,907 11.3 28,250
(1) Subsequent to 31 December 2025, the Directors declared a final dividend
for 2025 of 10.1p per Ordinary Share subject to approval at the Annual General
Meeting. This dividend will be accounted for as an appropriation of retained
earnings in the year ended 31 December 2026 and is not included as a liability
in the Statement of Financial Position as at 31 December 2025.
The trustees of the employee share trusts waived their entitlement to
dividends on shares held in the trusts to meet obligations arising on share
incentive schemes, which reduced the dividends paid for the year ended 31
December 2025 by £337k (2024: £151k).
13. OTHER ASSETS
2025 2024
£'k £'k
Prepayments and accrued income 799 778
Total 799 778
The carrying value of other assets approximates to fair value. There are no
amounts expected to be recovered more than 12 months after the reporting date.
14. GOODWILL
ACCOUNTING POLICY
Goodwill has been recognised in acquisitions of subsidiaries and represents
the difference between the cost of the acquisition and the fair value of the
net identifiable assets acquired. Goodwill is stated at cost less any
accumulated impairment losses.
Impairment of goodwill
The Group performs an annual impairment review which involves comparing the
carrying amount to the estimated recoverable amount and recognising an
impairment loss if the recoverable amount is lower than the carrying amount.
Impairment losses are recognised through the Profit or Loss Account and are
not subsequently reversed.
The recoverable amount is the greater of the fair value of the asset less
costs to sell and the value in use.
The value in use calculations use cash flow projections based on financial
budgets approved by management.
On 3 January 2014, the Group acquired Binomial Group Limited, the parent of
Sabre Insurance Company Limited, for a consideration of £245,485k satisfied
by cash. As from 1 January 2014, the date of transition to IFRS, goodwill was
no longer amortised but is subject to annual impairment testing. Impairment
testing involves comparing the carrying value of the net assets and goodwill
against the recoverable amount.
The goodwill recorded in respect of this transaction at the date of
acquisition was £156,279k. There has been no impairment to goodwill since
this date, and no additional goodwill has been recognised by the Group.
The Group performed its annual impairment test as at 31 December 2025 and 31
December 2024. The Group considers the relationship between the Group's market
capitalisation and the book value of its subsidiary undertakings, among other
factors, when reviewing for indicators of impairment.
Key assumptions
The valuation uses fair value less cost to sell. The key assumption on which
the Group has based this value is:
The market capitalisation of the Group as at 31 December 2025 of £320,580k
(31 December 2024: £345,000k).
The Directors concluded that the recoverable amount of the business unit would
remain in excess of its carrying value even after reasonably possible changes
in the key inputs and assumptions affecting its market value, such as a
significant fall in demand for its products or a significant adverse change
in the volume of claims and increase in other expenses, before the recoverable
amount of the business unit would reduce to less than its carrying value.
Therefore, the Directors are of the opinion that there are no indicators of
impairment as at 31 December 2025.
15. SHARE CAPITAL
2025 2025 2024 2024
Authorised share capital Number of shares £ Number of shares £
250,000,000 Ordinary Shares of £0.001 each 250,000,000 250,000 250,000,000 250,000
Issued ordinary share capital (fully paid up) Number of shares Share capital
£
As at 1 January 2025 250,000,000 250,000
Cancellation of shares under share buyback programme (3,400,000) (3,400)
As at 31 December 2025 246,600,000 246,600
Issued ordinary share capital (fully paid up) Number of shares Share capital
£
As at 1 January 2024 250,000,000 250,000
Cancellation of shares under share buyback programme - -
As at 31 December 2024 250,000,000 250,000
All shares are unrestricted and carry equal voting rights.
Share buyback
During the year the Group executed a share buyback programme. A total of
3,400,000 Ordinary Shares (representing 1.36% of Sabre Insurance Group plc's
issued share capital as at 31 December 2024) were purchased under this
programme for cancellation at a total cost of £5,067,110.46 including costs,
at an average share price of 146.19p per share, excluding any costs.
Own shares
Own shares are shares in Sabre Insurance Group plc that are held by the Sabre
Insurance Group Employee Benefit Trust ("EBT") for the purpose of issuing
shares under the Group's equity-settled share-based schemes (refer to Note 16
for further information).
Shares bought/(sold) on open market
Number of shares £
As at 1 January 2024 1,589,250 3,120,534
Shares purchased 986,377 1,483,654
Shares vested (612,919) (1,491,750)
As at 31 December 2024 1,962,708 3,112,438
Shares purchased 865,000 1,068,920
Shares vested (534,606) (827,383)
As at 31 December 2025 2,293,102 3,353,975
In thousands £'k
31 December 2024 3,112
31 December 2025 3,354
Shares issued to employees are recognised on a first-in-first-out basis.
As at 31 December 2025, The Sabre Insurance Group Employee Benefit Trust held
2,293,102 (2024:1,962,708) of the 246,600,000 issued Ordinary Shares with a
nominal value of £2,293.10 (2024: £1,962.71) in connection with the
operation of the Group's share plans. Refer to Notes 16 and 17 for additional
information on own shares held.
16. SHARE-BASED PAYMENTS
The Group operates equity-settled share-based schemes for all employees in the
form of a Long Term Incentive Plan ("LTIP"), Deferred Bonus Plan ("DBP") and
Share Incentive Plans ("SIP"), including Free Shares and Save As You Earn
("SAYE"). The shares are in the ultimate Parent Company, Sabre Insurance Group
plc.
The Group recognised a total expense in the Profit or Loss for the year ended
31 December 2025 of £2,142k (2024: £1,607k), relating to equity-settled
share-based plans.
Long Term Incentive Plan ("LTIP")
The LTIP is a discretionary share plan, under which the Board may grant
share-based awards ("LTIP Awards") to incentivise and retain
eligible employees.
LTIP Awards - Restricted Share Awards ("RSAs")
From 2021, the Group no longer issues awards under the LTIP Awards with
performance conditions, but instead issues RSAs.
The RSAs are structured as nil-cost rewards, to receive free shares on
vesting. Shares will normally vest three years after grant date, subject to
continued employment and the satisfaction of pre-determined underpins. Awards
are also subject to an additional two-year holding period, so that the total
time prior to any potential share sale (except to meet any tax liabilities
arising from the award) will generally be five years.
The total number of shares awarded under the scheme was 1,263,061 (2024:
935,780) with an estimated fair value at grant date of £1,554k (2024:
£1,581k). The fair value is based on the closing share price on the grant
date.
Future dividends are accrued separately and are not reflected in the fair
value of the grant.
The table below details the movement in the RSA:
Number of shares Weighted Average Exercise Price
Outstanding at 1 January 2024 2,227,222 NIL
Granted 935,780 NIL
Forfeited (40,863) NIL
Vested (441,684) NIL
Outstanding at 31 December 2024 2,680,455 NIL
Granted 1,263,061 NIL
Forfeited (19,715) NIL
Vested (523,443) NIL
Outstanding at 31 December 2025 3,400,358 NIL
The average unexpired life of RSAs is 1.3 years (2024: 1.3 years).
Deferred Bonus Plan ("DBP")
To encourage behaviour which does not benefit short-term profitability over
longer-term value, Directors and some key staff were awarded shares in lieu of
a bonus, to be deferred for two years, using the market value at the grant
date. The total number of shares awarded under the scheme was 631,156 (2024:
218,033) with an estimated fair value of £776k (2024: £374k). Of this award,
the number of shares awarded to Directors and Persons Discharging Managerial
Responsibilities ("PDMRs") was 592,547 (2024: 204,392) with an estimated fair
value of £729k (2024: £351k). Fair values are based on the share price at
grant date. All shares are subject to a two-year service period and are not
subject to performance conditions.
Future dividends are accrued separately and are not reflected in the fair
value of the grant. The DBP is recognised in the Profit or Loss Account on a
straight-line basis over a period of two years from grant date.
Share Incentive Plans ("SIPs")
The Sabre SIPs provide for the award of free Sabre Insurance Group plc shares,
Partnership Shares (shares bought by employees under the matching scheme),
Matching Shares (free shares given by the employer to match partnership
shares) and Dividend Shares (shares bought for employees with proceeds of
dividends from partnership shares). The shares are owned by the Employee
Benefit Trust to satisfy awards under the plans. These shares are either
purchased on the market and carried at fair value or issued by the Parent
Company to the trust.
Matching Shares
The Group has a Matching Shares scheme under which employees are entitled to
invest between £10 and £150 each month through the share trust from their
pre-tax pay. The Group supplements the number of shares purchased by giving
employees one free matching share for every three shares purchased up to
£1,800. Matching shares are subject to a three-year service period before the
matching shares are awarded. Dividends are paid on shares, including matching
shares, held in the trust by means of dividends shares. The fair value of such
awards is estimated to be the market value of the awards on grant date.
In the year ended 31 December 2025, 12,342 (2024: 11,464) matching shares were
granted to employees with an estimated fair value of £16k (2024: £16k).
As at 31 December 2025, 57,990 (2024: 48,134) matching shares were held on
behalf of employees with an estimated fair value of £75k (2024: £66k). The
average unexpired life of Matching Share awards is 1.4 years (2024: 1.5
years).
Save as You Earn ("SAYE")
The SAYE scheme allows employees to enter into a regular savings contract of
between £5 and £500 per month over a three-year period, coupled with a
corresponding option over shares. The grant price is equal to 80% of the
quoted market price of the shares on the invitation date. The participants of
the SAYE scheme are not entitled to dividends and therefore dividends are
excluded from the valuation of the SAYE scheme.
Estimated fair value of options at grant date:
SAYE 2023: 49 pence
SAYE 2024: 33 pence
SAYE 2025: 26 pence
The following table lists the inputs to the Black-Scholes model used to value
the awards granted in respect of the 2024 SAYE scheme.
2025 SAYE
Share price at grant date 128.0 pence
Expected term 3 years
Expected volatility(1) 31.5%
Continuously compounded risk-free rate 3.8%
Continuously compounded dividend yield 8.0%
Strike price at grant date 101.2 pence
(1) Volatility has been estimated using the historical daily average
volatility of the share price of the Group for the year immediately preceding
the grant date.
The table below details the movement in the SAYE scheme:
Number of shares Weighted Average Exercise Price
Outstanding at 1 January 2024 858,405 1.33
Granted 102,880 1.42
Forfeited (49,001) NIL
Vested - NIL
Outstanding at 31 December 2024 912,284 0.99
Granted 246,676 1.01
Forfeited (139,200) NIL
Vested (11,163) 0.85
Outstanding at 31 December 2025 1,008,597 0.94
The average unexpired life of the SAYE scheme is 1.5 years (2024: 1.5 years).
17. RESERVES
Own shares
Sabre Insurance Group plc established an Employee Benefit Trust ("EBT") in
2017 in connection with the operation of its share plans. The investment in
own shares as at 31 December 2025 was £3,354k (2024: £3,112k). The market
value of the shares in the EBT as at 31 December 2025 was £2,981k (2024:
£2,709k).
Merger reserve
Sabre Insurance Group plc was incorporated as a limited company on 21
September 2017. On 11 December 2017, immediately prior to the Group's listing
on the London Stock Exchange, Sabre Insurance Group plc acquired the entire
share capital of the former ultimate Parent Company of the Group, Barbados
TopCo Limited ("TopCo"). As a result, Sabre Insurance Group plc became the
ultimate parent of the Sabre Insurance Group. The merger reserve resulted from
this corporate reorganisation.
FVOCI reserve
The FVOCI reserve records the unrealised gains and losses arising from changes
in the fair value of debt securities at FVOCI. The movements in this reserve
are detailed in the Consolidated Statement of Comprehensive Income.
Revaluation reserve
The revaluation reserve records the fair value movements of the Group's
owner-occupied properties. Refer to Note 9 for more information on the
revaluation of owner-occupied properties.
Insurance/Reinsurance finance reserve
The insurance finance reserve comprises the cumulative insurance finance
income and expenses recognised in Other Comprehensive Income.
Share-based payments reserve
The Group's share-based payments reserve records the value of equity-settled
share-based payment benefits provided to the Group's employees as part of
their remuneration that has been charged through the income statement. Refer
to Note 16 for more information on share-based payments.
18. RELATED PARTY TRANSACTIONS
Sabre Insurance Group plc is the ultimate parent and ultimate controlling
party of the Group. The following entities included below form the Group.
Name Principal business Registered address
Entities in which the Group holds 100% of the issued share capital
Binomial Group Limited Intermediate holding company Sabre House, 150 South Street, Dorking, Surrey, RH4 2YY, United Kingdom
Sabre Insurance Company Limited Motor insurance underwriter Sabre House, 150 South Street, Dorking, Surrey, RH4 2YY, United Kingdom
Other controlled entities
Sabre 2017 Share Incentive Plan Employee Benefit Trust Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom
The Sabre Insurance Group Employee Benefit Trust Employee Benefit Trust Ocorian, 26 New Street, St Helier, JE2 3RA, Jersey
No single party holds a significant influence (>20%) over Sabre Insurance
Group plc.
Both Employee Benefit Trusts ("EBTs") were established to assist in the
administration of the Group's employee equity-based compensation schemes. The
UK registered EBT holds the all-employee SIP. The Jersey-registered EBT holds
the Long Term Incentive Plan ("LTIP") and Deferred Bonus Plan ("DBP").
While the Group does not have legal ownership of the EBTs and the ability of
the Group to influence the actions of the EBTs is limited to a trust deed, the
EBT was set up by the Group with the sole purpose of assisting in the
administration of these schemes, and is in essence controlled by the Group and
therefore consolidated.
During the period ended 31 December 2025, the Group donated no shares to the
EBTs (2024: NIL).
Key management compensation
Key management includes Executive Directors, Non-executive Directors and
Directors of subsidiaries which the Group considers to be senior management
personnel. Further details of Directors' shareholdings and remuneration can be
found in the Annual Report on Directors' Remuneration on pages 107 to 120 of
the 2026 Annual Report and Accounts.
The aggregate amount paid to Directors during the year was as follows.
2025 2024
£'k £'k
Remuneration 3,697 3,428
Contributions to defined contribution pension scheme 10 10
Shares granted under LTIP 1,030 954
Total 4,737 4,392
19. EARNINGS PER SHARE
Basic earnings per share
2025 2024
After tax Per share After tax Per share
£'k pence £'k pence
Profit for the year attributable to ordinary shareholders 37,915 15.37 35,961 14.48
Diluted earnings per share
2025
After tax Weighted average number of shares (000s) Per share pence
£'k
Profit for the year attributable to ordinary shareholders 37,915 246,668 15.37
Net share awards allocable for no further consideration 1,760 (0.11)
Total diluted earnings 248,428 15.26
2024
After tax Weighted average number of shares (000s) Per share pence
£'k
Profit for the year attributable to ordinary shareholders 35,961 248,419 14.48
Net share awards allocable for no further consideration 1,880 (0.11)
Total diluted earnings 250,299 14.37
20. EVENTS AFTER THE BALANCE SHEET DATE
Other than the declaration of a final dividend as disclosed in Note 12, there
have been no material changes in the affairs or financial position of the
Group and its subsidiaries since the Statement of Financial Position date.
Parent Company Statement of Financial Position
As at 31 December 2025
2025 2024
Notes £'k £'k
Assets
Cash and cash equivalents 45 282
Receivables 2 3 27
Other assets 21 11
Investments 3 455,355 453,213
Total assets 455,424 453,533
Liabilities
Payables 4 169 721
Other liabilities 104 109
Total liabilities 273 830
Equity
Share capital 247 250
Own shares (3,354) (3,112)
Merger reserve 236,949 236,949
Share-based payments reserve 3,495 2,620
Retained earnings 217,814 215,996
Total equity 455,151 452,703
Total liabilities and equity 455,424 453,533
No income statement is presented for Sabre Insurance Group plc as permitted by
section 408 of the Companies Act 2006. The profit after tax of the Parent
Company for the period was £42,772k (2024: £25,604k profit after tax).
Parent Company Statement of Changes in Equity
For the year ended 31 December 2025
Share capital Own shares Merger reserve Share-based payments reserve Retained earnings Total equity
Notes £'k £'k £'k £'k £'k £'k
Balance as at 1 January 2024 250 (3,121) 236,949 2,686 214,558 451,322
Profit for the period attributable to the owners of the Company - - - - 25,604 25,604
Share-based payment expense - - - (66) 183 117
Net movement in own shares - 9 - - - 9
Share buyback - - - - - -
Dividends paid - - - - (24,349) (24,349)
Balance as at 31 December 2024 250 (3,112) 236,949 2,620 215,996 452,703
Profit for the period attributable to the owners of the Company - - - - 42,771 42,771
Share-based payment expense - - - 875 449 1,324
Net movement in own shares - (242) - - - (242)
Share buyback 5 (3) - - - (5,064) (5,067)
Dividends paid - - - - (36,338) (36,338)
Balance as at 31 December 2025 247 (3,354) 236,949 3,495 217,814 455,151
Parent Company Statement of Cash Flows
For the year ended 31 December 2025
2025 2024
£'k £'k
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year 42,771 25,604
Operating cash flows before movements in working capital 42,771 25,604
Movements in working capital:
Change in receivables 24 14
Change in other assets (10) 22
Change in payables (552) 721
Change in other liabilities (5) (269)
Net cash generated from operating activities 42,228 26,092
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash used in acquiring and disposing of own shares (1,069) (1,484)
Options exercised under share option schemes 9 -
Share buyback (5,067) -
Dividends paid (36,338) (24,349)
Net cash used by financing activities (42,465) (25,833)
Net (decrease)/increase in cash and cash equivalents (237) 259
Cash and cash equivalents at the beginning of the year 282 23
Cash and cash equivalents at the end of the year 45 282
Notes To The Parent Company Financial Statements
For the year ended 31 December 2025
1. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these
Consolidated and Company Financial Statements are included in the specific
notes to which they relate. These policies have been consistently applied to
all the years presented, unless otherwise indicated.
1.1. Basis of preparation
These financial statements present the Sabre Insurance Group plc Company
Financial Statements for the period ended 31 December 2025, comprising the
Parent Company Statement of Financial Position, Parent Company Statement of
Changes in Equity, Parent Company Statement of Cash Flows, and related notes.
The financial statements of the Company have been prepared in accordance with
UK-adopted international accounting standards, comprising International
Accounting Standards ("IAS") and International Financial Reporting Standards
("IFRS"), and the requirements of the Companies Act 2006. Endorsement of
accounting standards is granted by the UK Endorsement Board ("UKEB").
In accordance with the exemption permitted under section 408 of the Companies
Act 2006, the Company's Profit or Loss Account and related notes have not been
presented in these separate financial statements.
The financial statements are prepared in accordance with the going concern
principle using the historical cost basis, except for those financial assets
that have been measured at fair value.
The financial statements values are presented in pounds sterling (£) rounded
to the nearest thousand (£'k), unless otherwise indicated.
The accounting policies that are used in the preparation of these separate
financial statements are consistent with the accounting policies used in the
preparation of the Consolidated Financial Statements of Sabre Insurance Group
plc as set out in those financial statements.
As permitted by section 408 of the Companies Act 2006, the Statement of
Comprehensive Income of the Parent Company is not presented. The additional
accounting policies that are specific to the separate financial statements of
the Company are set out below.
2. RECEIVABLES
2025 2024
£'k £'k
Due within one year
Other debtors 3 27
As at 31 December 3 27
3. INVESTMENTS
The Company's financial assets are summarised below:
2025 2024
£'k £'k
Investment in subsidiary undertakings 455,355 453,213
Total 455,355 453,213
3.1. Investment in subsidiary undertakings
ACCOUNTING POLICY - INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Investment in subsidiaries is stated at cost less any impairment.
2025 2024
£'k £'k
As at 1 January 453,213 451,606
Additions 2,142 1,607
As at 31 December 455,355 453,213
The only operating insurance subsidiary of the Company is Sabre Insurance
Company Limited, from which the value of the Group is wholly derived, as there
are no other trading entities within the Group. The Company performed its
annual impairment test as at 31 December 2025 and 31 December 2024. The
Company considers the relationship between the Group's market capitalisation
and the book value of its subsidiary undertakings, among other factors, when
reviewing for indicators of impairment. As at 31 December 2025 and 31 December
2024, the Company's securities were traded on a liquid market; therefore,
market capitalisation could be used as an indicator of value.
Having carried out this assessment, the Board concluded, on the basis of the
cautious assumptions outlined below, that the value in use is higher than the
current carrying value of the investment in subsidiary and no impairment is
necessary.
Key assumptions
We have used a dividend discount model to estimate the value in use, wherein
dividend payments are discounted to the present value. Dividends have been
estimated, based on forecasted financial information, over a four-year
forecast period, with a terminal growth rate applied. The key assumptions used
in the preparation of future cash flows are: plan-period financial
performance, dividend payout ratio, long-term growth rates and discount rate.
The key assumptions used in the calculation for the value in use is set out
below:
‒ Plan period financial performance set in line with the
Group's expectations
‒ Dividend payout ratio in line with the Group's strategy
‒ Long-term growth rate beyond the plan period of 2%
‒ Discount rate of 8.4%, being a calculated cost of capital
using market rate returns of Sabre and comparable insurers
These calculations use post-tax cash flow projections based on the Group's
capital models. As the value in use exceeds the carrying amount, the
recoverable amount remains supportable.
The Group has conducted sensitivity testing to the recoverable amount, in
order to understand the relevance of these various factors in arriving at the
value in use.
‒ Dividend within the plan period - To assess the impact of
reasonable changes in performance on our base case impairment analysis and
headroom, we flexed the dividend within the plan period by +10% and -10%. In
doing so, the value in use varied by approximately 10% around the central
scenario.
‒ Long-term growth rate - To assess the impact of reasonable
changes in the long-term growth rate on our base case impairment analysis and
headroom, we flexed the long-term growth rate by +1% and -1%. In doing so, the
value in use varied by approximately 8%-11% around the central scenario.
‒ Discount rate - To assess the impact of reasonable changes
in the dividend payout ratio on our base case impairment analysis and
headroom, we flexed the average discount rate by +2% and -2%. In doing so, the
value in use varied by approximately 24% (up) and 47% (down) around the
central scenario.
In all these scenarios there is material headroom over the carrying value of
the investment in subsidiary.
Name of subsidiary Place of incorporation Principal activity
Directly held by the Company
Binomial Group Limited United Kingdom Intermediate holding company
Indirectly held by the Company
Sabre Insurance Company Limited United Kingdom Motor insurance underwriter
The registered office of each subsidiary is disclosed within Note 18 of the
consolidated Group Financial Statement.
4. PAYABLES
2025 2024
£'k £'k
Due within one year
Amounts due to Group undertakings 169 721
As at 31 December 169 721
5. SHARE CAPITAL AND RESERVES
Full details of the share capital and the reserves of the Company are set out
in Note 15 and Note 17 to the Consolidated Financial Statements.
6. DIVIDEND INCOME
ACCOUNTING POLICY - DIVIDEND INCOME
Dividend income from investment in subsidiaries is recognised when the right
to receive payment is established.
7. RELATED PARTY TRANSACTIONS
Sabre Insurance Group plc, which is incorporated in the United Kingdom and
registered in England and Wales, is the ultimate parent undertaking of the
Sabre Insurance Group of companies.
The following balances were outstanding with related parties at year end:
2025 2024
£'k £'k
Due to
Sabre Insurance Company Limited 169 721
Total 169 721
The outstanding balance represents cash transactions effected by Sabre
Insurance Company Limited on behalf of its Parent Company, and will be settled
within one year.
8. SHARE-BASED PAYMENTS
Full details of share-based compensation plans are provided in Note 16 to the
Consolidated Financial Statements.
9. RISK MANAGEMENT
The risks faced by the Company, arising from its investment in subsidiaries,
are considered to be the same as those presented by the operations of the
Group. Details of the key risks and the steps taken to manage them are
disclosed in Note 2 to the Consolidated Financial Statements.
10. DIRECTORS' AND KEY MANAGEMENT REMUNERATION
The Directors and key management of the Group and the Company are the same.
The aggregate emoluments of the Directors and the remuneration and pension
benefits payable in respect of the highest paid Director are included in the
Directors' Remuneration Report in the Governance section of the Annual Report
and Accounts.
Financial Reconciliations
GROSS WRITTEN PREMIUM
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Movement in unearned premium (11,649) (7,203) 40,590
Gross written premium 202,900 236,435 225,098
NET LOSS RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Insurance service expense 174,491 154,661 139,497
Less: Amortisation of insurance acquisition cash flows (16,753) (18,166) (14,057)
Less: Amounts recoverable from reinsurers for incurred claims (54,552) (13,026) (31,532)
Less: Directly attributable claims expenses (7,171) (7,041) (6,085)
Add: Net impact of discounting 7,068 6,914 8,201
Undiscounted net claims incurred 103,083 123,342 96,024
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net earned premium 190,677 210,021 156,002
Net loss ratio 54.1% 58.7% 61.6%
EXPENSE RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Other operating expenses 29,850 28,305 26,587
Add: Amortisation of insurance acquisition cash flows 16,753 18,166 14,057
Add: Directly attributable claims expenses 7,171 7,041 6,085
Total operating expenses 53,774 53,512 46,729
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net earned premium 190,677 210,021 156,002
Expense ratio 28.2% 25.5% 30.0%
COMBINED OPERATING RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Net loss ratio 54.1% 58.7% 61.6%
Expense ratio 28.2% 25.5% 30.0%
Combined operating ratio 82.3% 84.2% 91.6%
DISCOUNTED NET LOSS RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Insurance service expense 174,491 154,661 139,497
Less: Amortisation of insurance acquisition cash flows (16,753) (18,166) (14,057)
Less: Amounts recoverable from reinsurers for incurred claims (54,552) (13,026) (31,532)
Less: Directly attributable claims expenses (7,171) (7,041) (6,085)
Net claims incurred 96,015 116,428 87,823
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net earned premium 190,677 210,021 156,002
Discounted net loss ratio 50.4% 55.4% 56.3%
DISCOUNTED COMBINED OPERATING RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Net loss ratio 50.4% 55.4% 56.3%
Expense ratio 28.2% 25.5% 30.0%
Discounted combined operating ratio 78.6% 80.9% 86.3%
NET INSURANCE MARGIN
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Net claims incurred 103,083 123,342 96,024
Total operating expenses 53,774 53,512 46,729
Total insurance expense 156,857 176,854 142,753
Insurance revenue 217,990 248,131 188,246
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net insurance revenue 194,118 214,514 159,740
Net insurance margin 19.2% 17.6% 10.6%
RETURN ON TANGIBLE EQUITY
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
IFRS net assets at year end 257,862 258,346 242,412
Less: Goodwill at year end (156,279) (156,279) (156,279)
Closing tangible assets 101,583 102,067 86,133
Opening tangible equity 102,067 86,133 72,709
Average tangible equity 101,825 94,100 79,421
Profit after tax 37,915 35,961 18,065
Return on tangible equity 37.2% 38.2% 22.7%
SOLVENCY COVERAGE RATIO - PRE-DIVIDEND
As at 31 December
2025 2024 2023
£'k £'k £'k
Solvency II net assets 133,080 134,695 121,099
Solvency capital requirement 66,986 62,199 58,998
Solvency coverage ratio - pre-dividend 198.7% 216.6% 205.3%
SOLVENCY COVERAGE RATIO - POST-DIVIDEND
As at 31 December
2025 2024 2023
£'k £'k £'k
Solvency II net assets 133,080 134,695 121,099
Less: Interim/Final dividend (24,907) (28,250) (20,250)
Solvency II net assets - post-dividend 108,173 106,445 100,849
Solvency capital requirement 66,986 62,199 58,998
Solvency coverage ratio - post-dividend 161.5% 171.1% 170.9%
Glossary of Terms
Acquisition cash flows Cash flows arising from the costs of selling, underwriting and starting a
group of insurance contracts (issued or expected to be issued) that are
directly attributable to the portfolio of insurance contracts to which the
group belongs. Such cash flows include cash flows that are not directly
attributable to individual contracts or groups of insurance contracts within
the portfolio.
Adjusted IFRS net assets Equals the Group's IFRS net assets, less Goodwill.
Asset for incurred claims ("AIC") The reinsurers' share of the liability for incurred claims ("LIC").
Asset for remaining coverage ("ARC") The reinsurers' share of the liability for remaining coverage ("LRC").
Combined operating ratio ("COR") The combined operating ratio is the ratio of total expenses (which comprises
commission expenses and operating expenses), and net insurance claims relative
to net earned premium ("NEP"), expressed as a percentage.
Contractual service margin ("CSM") This represents the unearned profit the entity will recognise as it provides
insurance contract service under the insurance contracts in the group. It is a
component of the carrying amount of the asset or liability for a group of
insurance contracts.
Coverage period The period during which the entity provides insurance contract services. The
period includes the insurance contract services that relate to all premiums
within the boundary of the insurance contract.
Effective tax rate Effective tax rate is defined as the approximate tax rate calculated by
dividing the Group's profit before tax by the tax charge going through the
Profit or Loss Account.
Expense ratio Expense ratio is a measure of total expenses (which comprises commission
expenses and operating expenses), and claims handling expenses, relative to
net earned premium ("NEP"), expressed as a percentage.
Fair value through OCI ("FVOCI") Unrealised gains and losses from the remeasurement of the fair value financial
assets are recognised in the Statement of Other Comprehensive Income ("OCI").
Financial Reporting Council ("FRC") The UK's regulator for the accounting, audit and actuarial professions,
promoting transparency and integrity in business.
Fulfilment cash flows ("FCF") An explicit, unbiased and probability-weighted estimate (i.e. expected value)
of the present value of the future cash outflows minus the present value of
the future cash inflows that will arise as the entity fulfils insurance
contracts, including a risk adjustment for non-financial risk.
Greenhouse Gas (GHG) Gases in the atmosphere that absorb and re‑emit infrared radiation, trapping
heat and contributing to the greenhouse effect.
Gross earned premium ("GEP") The proportions of premium attributable to the periods of risk that relate to
the current accounting period. It represents gross written premium ("GWP")
adjusted by the unearned premium provision at the beginning and end of the
accounting period, before deduction of reinsurance expense.
Gross written premium ("GWP") Gross written premium comprises all premiums in respect of policies
underwritten in a particular financial year, regardless of whether such
policies relate in whole or in part to a future financial year, before
deduction of reinsurance expense.
IFRS 17 "Insurance Contracts" An accounting standard that addresses the establishment of principles for the
recognition, measurement, presentation and disclosure of insurance contracts
within the scope of the standard (effective 1 January 2023).
IFRS net assets The difference between the Group's total assets and total liabilities.
Insurance revenue Gross earned premium ("GEP") plus instalment income.
International Financial Reporting Standards ("IFRS") Accounting standards issued by the IFRS Foundation and the International
Accounting Standards Board ("IASB").
Liability for incurred claims ("LIC") An entity's obligation to:
a) Investigate and pay valid claims for insured events that have already
occurred, including events that have occurred but for which claims have not
been reported, and other incurred insurance expenses; and
b) Pay amounts that are not included in (a) and that relate to:
i. insurance contract services that have already been provided;
or
ii. any investment components or other amounts that are not
related to the provision of insurance contract services and that are not in
the liability for remaining coverage.
Liability for remaining coverage ("LRC") An entity's obligation to:
a) investigate and pay valid claims under existing insurance contracts for
insured events that have not yet occurred (i.e. the obligation that relates
to the unexpired portion of the insurance coverage); and
b) pay amounts under existing insurance contracts that are not included in (a)
and that relate to:
i. insurance contract services not yet provided (i.e. the obligations that
relate to future provision of insurance contract services); or
ii. any investment components or other amounts that are not related to the
provision of insurance contract services and that have not been transferred to
the liability for incurred claims.
Net claims incurred Net claims incurred is equal to gross claims incurred less amounts recovered
from reinsurers.
Net earned premium ("NEP") Gross earned premium ("GEP") less reinsurance expense.
Net insurance margin ("NIM") Net insurance margin measures how much net insurance profit is generated as a
percentage of net insurance revenue.
Net insurance revenue Insurance revenue less reinsurance expense.
Net loss ratio ("NLR") Net loss ratio measures net insurance claims, less claims handling expenses,
relative to net earned premium expressed as a percentage.
Network for Greening the Financial System (NGFS) A global coalition of central banks and financial supervisors working to
develop climate‑ and nature‑related risk management frameworks and to
mobilise finance for a sustainable economy.
Own Risk and Solvency Assessment ("ORSA") A prospective assessment of the Group's risks and solvency capital
requirements.
Periodic Payment Order ("PPO") A compensation award as part of a claims settlement that involves making a
series of annual payments to a claimant over their remaining life to cover the
costs of the care they will require.
Premium allocation approach ("PAA") Method for measuring insurance contracts under IFRS 17 "Insurance Contracts".
Representative Concentration Pathways (RCPs) Climate‑change scenarios used to model future greenhouse‑gas
concentrations and their associated radiative forcing levels.
Return on tangible equity Return on tangible equity is measured as the ratio of the Group's profit after
tax to its average tangible equity over the financial year, expressed as a
percentage.
Risk adjustment for non-financial risk The compensation an entity requires for bearing the uncertainty about the
amount and timing of the cash flows that arises from non-financial risk as the
entity fulfils insurance contracts.
Shared Socioeconomic Pathways (SSPs) Global scenarios describing possible future socioeconomic developments up to
2100, used in climate research to assess how demographic, economic,
technological, and policy trends influence greenhouse‑gas emissions and
climate risks.
Solvency capital ratio The ratio of Own Funds (Solvency II capital) to Solvency Capital Requirement
"SCR".
Solvency Capital Requirement ("SCR") The total amount of capital that the Group must hold to cover the risks under
the Solvency II regulatory framework. The Group is required to maintain
eligible own funds of at least 100% of the SCR.
The Group uses the Standard Formula to determine the SCR.
WBCSD/WRI Scopes The three categories of greenhouse gas (GHG) emissions defined under the GHG
Protocol, the globally recognized standard for corporate carbon accounting.
The protocol was jointly developed by the World Resources Institute (WRI) and
the World Business Council for Sustainable Development (WBCSD).
SUMMARY OF RESULTS
Year to Year to Change
31 December 2025
31 December 2024
Gross written premium £202.9m £236.4m (14.2)%
Net insurance margin 19.2% 17.6% 1.6 ppts
Net loss ratio 54.1% 58.7% (4.6) ppts
Combined operating ratio 82.3% 84.2% (1.9) ppts
IFRS Profit before tax £51.0m £48.6m 4.9%
IFRS Profit after tax £37.9m £36.0m 5.3%
Total dividend per share 13.5p 13.0p 3.8%
Return on tangible equity (annualised) 37.2% 38.2% (1.0) ppts
Solvency coverage ratio (pre-final and special dividend) 198.7% 216.6% (17.9) ppts
Solvency coverage ratio (post-final and special dividend) 161.5% 171.1% (9.6) ppts
Solvency coverage ratio (post-dividend and share buyback*) 154.0% 163.1% (9.1) ppts
* = Share buyback subject to regulatory approval
Geoff Carter, Chief Executive Officer of Sabre, said:
"I am very pleased that Sabre has continued its track record of delivering
strong profits throughout the underwriting cycle, including the softer pricing
environment seen in 2025. With market pricing having lagged claims spend
trends for much of the year, we maintained our underwriting discipline,
executing robust cycle management and allowed volumes to reduce whilst
delivering a strong and improving margin through the period, leading to a 4.9%
increase in profit before tax.
The benefits of this strong discipline position us well for the future. Having
priced prudently for potential claims inflation throughout the period, we
benefitted from positive experience as inflation moderated in the latter part
of the year. This also allowed us to drive both premium and policy growth in
Q4 and into 2026 - in the first two months of 2026, Motor Vehicle gross
written premium is up over 5% year-on-year.
Alongside careful management of our existing business, we have progressed the
Ambition 2030 initiatives announced at our Capital Markets Event in December
2024. We remain confident in delivering our target of more than £80m of
profit before tax in 2030. A key milestone this year was the launch of Sabre
Direct in H1, our direct Motorcycle offering, which has been growing well
throughout the year. Later in 2025, we also began testing our differentiated
pricing models, which are key to supporting the growth of our core Motor
Vehicle business, with positive results to date.
Our Motor Vehicle business performed incredibly well during the year,
delivering an undiscounted net loss ratio of 50.5%, a 5.6ppts year-on-year
improvement reflecting the strength of our underwriting and claims management.
Motorcycle and Taxi performance improved in the second half, delivering
full-year undiscounted net loss ratios of 70.0% and 88.0% respectively, a
significant improvement on the half-year position. We have grown Motorcycle
premium by 9.3% year-on-year, while we have allowed Taxi premium to reduce by
27.4% as market conditions in that segment remain unattractive.
We continue to aim to pay a dividend in-line with growth in earnings during
the year, while maintaining our post-dividend solvency coverage ratio between
140% to 160%. Our strong performance in 2025 has allowed us to increase the
dividend per share for 2025 by 3.8% to 13.5p, including the interim dividend
of 3.4p already paid. At the same time, the Board has chosen to execute a
buyback of £5m (subject to regulatory approval) which follows the buyback
executed in 2025. This is indicative of the Board's confidence in the Group's
robust capital position and ability to continue to generate organic capital as
we look to grow through to our Ambition 2030 target.
Looking ahead to 2026 and beyond, I see a clear opportunity to grow both
profits and premium over the medium-term. We expect the Group to continue
premium growth in 2026, and to deliver a profit slightly ahead of 2025 as the
high-margin business written in 2025 earns through. I anticipate we will
continue to deliver sustainable profitable growth as we move towards 2030.
I would like to take this opportunity to thank all of Sabre's staff for their
continued hard work in delivering another excellent set of results this year."
FINANCIAL HIGHLIGHTS
- Profit before tax up by 4.9%
- Net insurance margin improved to 19.2%, comfortably within target range
- Gross written premium down 14.2% in-line with expectations given softer
market pricing and active cycle management
- Dividend increased to 13.5p per share - up 3.8% year-on-year
- Announcing the Group's second share buyback programme of £5m, subject to
regulatory approval
- Strong capital position, at 161.5% post-dividend, and 154.0% after
dividend and proposed share buyback, well within our target range of 140% to
160%
STRATEGIC HIGHLIGHTS
- Maintained underwriting discipline and responded appropriately to
reduction in claims inflation during the year
- Profits improved despite weak market conditions, demonstrating the
strength of Sabre's underwriting-focussed strategy
- Ambition 2030 initiatives on track
- Sabre Direct, our new direct, online-only Motorcycle product was launched
on schedule
- Testing of differentiated pricing in core Motor Vehicle product began in
late 2025
- Continue to book cautious inflation assumptions on most recent accident
year to reflect uncertainty in future inflationary risks
MARKET
- Market motor insurance premium prices reduced during 2025, stabilising
towards the end of the year
- Our view is that pricing has fallen behind cost and claims inflation, and
a correction is required
- Claims inflation appears to have softened to mid-single-digits
- Having taken a cautious view of claims inflation, Sabre has been
well-placed to manage the pricing cycle through the end of 2025 and into 2026
- Closure of regulatory review into premium financing and UK Government
Taskforce covering motor insurance pricing considerably reduces regulatory
uncertainty
2026 OUTLOOK AND BEYOND
- Expect strong margins in 2026, within our target 18% to 22% range, as
well-priced policies written in 2025 and 2026 earn through
- Subject to market conditions, we expect to return to year-on-year growth
in Gross Written Premium.
- Motor Vehicle premium in Q1 to date is over 5% ahead of Q1 2025
- Ambition 2030 remains on track. In-line with our planned timetable,
testing will continue this year with some impact on 2026 as our initiatives
start to take effect and more significant impacts from 2027 onwards
ENQUIRIES
Sabre Insurance
Group
0330 024 4696
Geoff Carter, Chief Executive Officer
Adam Westwood, Chief Financial Officer
Teneo
020 72602700
James Macey White
Ffion Dash
ANALYST PRESENTATION
Event Title: Sabre Insurance - Full Year Results 2025
Time Zone: Dublin, Edinburgh, Lisbon, London
Start Time/Date: 09:30 Tuesday, March 10, 2026
Duration: 60 minutes
Webcast: https://brrmedia.news/SBREFY
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Phone Type Phone Number
UK Local: +44 (0) 33 0551 0200 / Toll Free: 0808 109 0700
USA Local: +1 786 697 3501 / Toll Free: 866 580 3963
Password, if prompted Quote Sabre Insurance when prompted by the operator
Please join the event 5-10 minutes prior to scheduled start time. When
prompted, provide the confirmation code or event title.
A replay will be made available on the Sabre website following the conclusion
of the presentation.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014.
Webcast: https://brrmedia.news/SBREFY
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbrrmedia.news%2FSBREFY&data=05%7C02%7Chanro.vanheerden%40sabre.co.uk%7C4604d2e647114527aa6308de7b5cba36%7C57dd0ee8ea364e50af2cd5f1da335307%7C0%7C0%7C639083835358228949%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=ey4nYcUQpoMd7cAfpJ55YDcKZCa7fJlTiR4VHlH5dPQ%3D&reserved=0)
Phone Type Phone Number
UK Local: +44 (0) 33 0551 0200 / Toll Free: 0808 109 0700
USA Local: +1 786 697 3501 / Toll Free: 866 580 3963
Password, if prompted Quote Sabre Insurance when prompted by the operator
Please join the event 5-10 minutes prior to scheduled start time. When
prompted, provide the confirmation code or event title.
A replay will be made available on the Sabre website following the conclusion
of the presentation.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014.
DIVIDEND TIMETABLE
Ex-dividend date: 23 April 2026
Record date: 24 April 2026
Payment date: 5 June 2026
FORWARD-LOOKING STATEMENTS DISCLAIMER
Cautionary statement
This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements may be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "will" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts and involve
predictions. Forward-looking statements may and often do differ materially
from actual results. Any forward-looking statements reflect Sabre's current
view with respect to future events and are subject to risks relating to future
events and other risks, uncertainties and assumptions relating to Sabre's
business, results of operations, financial position, prospects, growth or
strategies and the industry in which it operates.
Forward-looking statements speak only as of the date they are made and cannot
be relied upon as a guide to future performance. Save as required by law or
regulation, Sabre disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements in this
announcement that may occur due to any change in its expectations or to
reflect events or circumstances after the date of this announcement.
The Sabre Insurance Group plc LEI number is 2138006RXRQ8P8VKGV98.
Chief Executive Officer's Review
"Our profitability clearly demonstrates the benefit of our on-going commitment
to disciplined underwriting"
Geoff Carter
Chief Executive Officer
Healthy premium levels, increased profit and attractive capital returns
2025 was another strong year for Sabre. We delivered an increased profit from
a lower premium base and made significant progress with our Ambition 2030
initiatives.
Our profitability clearly demonstrates the benefit of our on-going commitment
to disciplined underwriting, treating profit as the target and volume an
output. We priced prudently for potential claims inflation on business written
in the year, despite soft market conditions, and benefitted from positive
experience as inflation moderated in the latter part of the year which allowed
us to drive growth in both premium and policy count in Q4 and into 2026.
The Headline numbers for 2025 are:
Gross written premium(1) IFRS profit before tax
£202.9m £51.0m
2024 | £236.4m 2024 | £48.6m
1 Alternative performance measure. For reconciliations to alternative
performance measures, see pages 212 to 216 of the 2026 Annual Report and
Accounts
Within this we delivered a very positive core motor loss ratio of 50.5%. We
have seen both Motorcycle and Taxi loss ratios improve in the second half of
the year and continue to expect these products to deliver useful additional
profit for the business. Our overall financial year loss ratio of 54.1% was a
4.6ppts improvement on 2024 and delivered a net insurance margin of 19.2%,
well inside our target range.
We have continued to ensure our prices fully cover our view of claims costs
and are calculated to deliver our target margins. In our view, claims
inflation moderated during the year and we believe it is now at a mid-single
digit level.
Reflections on 2025
In my 2024 Review, I outlined our hopes and expectations for 2025. These
included:
‒ We would deliver a strong financial result through our
differentiated and focused approach to pricing
‒ We would test the first stages of our Ambition 2030 plans
‒ We would expand our Motorcycle distribution
‒ We would demonstrate continued focus on customer
experience through development of a self-service portal
‒ Market rates would be competitive in H1, and increase in
H2 to protect margins across the market
‒ Premium levels would be partially impacted by market
pricing levels
I'm delighted that we delivered on the majority of these objectives. While
market pricing stabilised in H2, there were no signs of meaningful increases,
which is discussed further in the Market section.
Ambition 2030 plans - Test new pricing models
As hoped, we successfully conducted our initial pricing tests, gathering
valuable feedback that will allow us to begin the ramp-up of initiatives in
2026. Given that market pricing was generally not supportive of growth, the
increase in our in-force policy count in Q4 indicates that our refreshed
strategy allows us to grow profitably even in more challenging
market conditions.
Motorcycle
Our new direct product launched on schedule, attracting business almost
entirely through Price Comparison Websites. "Sabre Direct" was launched with a
restricted footprint in order to allow us to test and learn, and to amend
prices as we gathered more data. We are now confident in our pricing
proposition and will continue to expand our footprint through 2026.
We are also servicing all polices in-house rather than outsourcing. This is
supported through low fixed costs, with the product being entirely on-line,
with web-chat support and no call centre.
Customer Portal/Experience
We have continued to develop and refine our online portal and are benefitting
from an increasing volume of customers using this as their preferred servicing
model. This has supported positive customer experience as well as laying the
foundations to reduce direct product servicing costs over time.
Regulation
Our approach is to operate in-line with both the spirit and the letter of all
relevant regulation, with a continued focus on delivering good customer
outcomes.
We were pleased to see the conclusions of the Government Taskforce on
Insurance in late 2025. This concluded that the market functioned well and
that price increases were reflective of increased claims costs - which were
primarily driven by external factors. This has always been our view as
outlined in previous result announcements, and we hope this removes a cloud
over the industry.
We continue to believe we have low exposure to on-going areas of regulatory
focus, which appear to be primarily poor value ancillary products, high APR's
for premium finance and certain claims management activities.
Market
In our view the market is currently over-competing and risks undermining
margins. This is not something we will allow to happen at Sabre, and we remain
focussed on underwriting discipline.
As noted earlier, we believe claims inflation is returning to historical norms
of mid-single digit levels, whilst overall there has been little compensating
market level rate increase in 2025.
At an overall level this is likely to drive reduced market-level profitability
in 2026 although this may look very different for individual competitors, such
as Sabre, where underwriting profitability has remained the focus.
Capital and dividend
We have increased our dividend to 13.5p per share for 2025, reflecting
increased profits and strong capital generation. While our post-dividend
solvency ratio of 161.5% is below 2024, this remains above our preferred
operating range. The Board has elected to use additional capital, paying down
into the range, to execute a buyback of £5m, the same amount as in the
previous year. This is indicative of the Board's confidence in the Group's
robust capital position and ability to generate further capital as we look to
grow through to our Ambition 2030 target.
People
Our success in 2025 and confidence about the future are entirely due to the
efforts and commitment of all Sabre's people. In 2025 the whole business
excelled in pushing to deliver the in-year result as well as continuing to
develop our Ambition 2030 plans.
In return we were delighted to be able to pay a Christmas Bonus as well as
performance bonuses. In addition, in the year we agreed an extra day's holiday
for all staff to be taken on or around their birthday.
Our hybrid way of working with all staff spending a minimum of 3 days in the
office continues to work well for the business and our people and we have no
plans to change this.
Environmental, Social and Governance ("ESG")
Environmental, social and governance matters remain integral to how we make
decisions as a business. We continue to uphold our environmental commitments
and values, ensuring fairness to our people, customers, partners and the
planet. During the year, we have made continued progress towards our net-zero
ambitions, as outlined in the 'Responsibility and Sustainability' section of
this report on pages 54 to 66 of the 2026 Annual Report and Accounts.
Artificial intelligence
Throughout the year we continued to position the business to benefit from
potential AI driven opportunities and to manage the threats arising from AI.
This includes running numerous efficiency tests, utilising large language
models and other novel pricing and analysis models and preparing for possible
medium-term changes in distribution - for example AI driven premium
comparisons. Overall, we believe that as a focused product manufacturer AI
will benefit rather than threaten our business.
Outlook for 2026
We will continue to focus on writing business at our target margins, with
overall premium levels being influenced by market pricing dynamics. As the
year progresses, we expect to begin seeing the noticeable positive premium
impact of our Ambition 2030 plans. We expect the Group to continue premium
growth in 2026, and to deliver a profit slightly ahead of 2025 as the
high-margin business written in 2025 earns through. I anticipate we will
continue to deliver sustainable profitable growth as we move towards 2030.
In my next report I look forward to providing more detail on the development
and impact of this work, as well as reporting another strong in year
performance. Huge thanks to all our people for making this happen, and to the
board members for their continuing support and constructive challenge.
Geoff Carter
Chief Executive Officer
9 March 2026
Chief Financial Officer's Review
"Demonstrating Sabre's strengths through the market cycle."
Adam Westwood
Chief Financial Officer
Highlights
2025 2024
Gross written premium* £202.9m £236.4m
Net insurance margin* 19.2% 17.6%
Net loss ratio* 54.1% 58.7%
Combined operating ratio* 82.3% 84.2%
IFRS profit before tax £51.0m £48.6m
IFRS profit after tax £37.9m £36.0m
Solvency coverage ratio (pre-dividend)* 198.7% 216.6%
Solvency coverage ratio (post-dividend)* 161.5% 171.1%
Return on tangible equity* 37.2% 38.2%
* Alternative performance metrics are reconciled to IFRS reported figures on
pages 212 to 216 of the 2026 Annual Report and Accounts
Executive summary
Sabre's performance in 2025 has demonstrated the strength of the Group's core
strategy and delivered a strong result despite challenging market conditions.
The Group has grown profit before tax by 4.9% and improved margin by 1.6ppts
through deploying strict pricing discipline and balancing profitability with
the volume of business written, allowing the top-line to decrease as market
pricing has remained below inflation.
Whilst the motor insurance market is expected to experience a drop in
profitability in 2026, Sabre's approach has provided a strong foundation for
continuing profitable growth as the Group delivers consistent profitability
and capital returns.
Insurance revenue
2025 2024
Gross written premium £202.9m £236.4m
Movement in unearned element of liability for remaining coverage £11.7m £7.2m
Gross earned premium £214.6m £243.6m
Customer instalment income £3.4m £4.5m
Insurance revenue £218.0m £248.1m
Reinsurance expense (£23.9m) (£33.6m)
Net insurance revenue £194.1m £214.5m
Gross written premium by product
Motor vehicle £180.1m £209.9m
Motorcycle £10.6m £9.7m
Taxi £12.2m £16.8m
Policy counts by product
Motor vehicle ('000) 201 217
Motorcycle ('000) 40 38
Taxi ('000) 8 11
The 14.2% decline in premium was as expected given market pricing decreases
during the year, with Sabre pricing to ensure bottom-line stability and
allowing volumes of business written to drop in unfavourable conditions, in
line with our long-term strategy. The dip in premium was weighted towards the
first half of the year, with conditions stabilising in the second half
allowing a gradual return to growth in the fourth quarter.
Whilst the Taxi business has been in a holding pattern to preserve
profitability in a difficult market, we have started to grow the Motorcycle
business, which now operates through an established broker relationship and
the Sabre Direct brand, launched in 2025 and a cornerstone of the Group's
Ambition 2030 initiatives. The Sabre Direct brand remains deliberately
restricted as we gain comfort in the product, and we expect to continue to
release these restrictions and grow the product throughout 2026.
The 'unearned' element of the liability for remaining coverage represents the
element of written premium covering future periods, which has the effect of
smoothing gross earned premium ("GEP") (and therefore insurance revenue) over
time, so where there is a big change in written premium, insurance revenue
will change more slowly. Customer instalment income reflects the interest
income charged on instalment policies and remains a relatively small
percentage of the Group's total insurance revenue.
Gross written premium(1) IFRS profit before tax
£202.9m £51.0m
2024 | £236.4m 2024 | £48.6m
1 Alternative performance measure. For reconciliations to alternative
performance measures, see pages 212 to 216 of the 2026 Annual Report and
Accounts
Insurance expense
2025 2024
Undiscounted gross claims incurred £173.8m £143.8m
Discounting ((1)) (£23.3m) (£14.3m)
Directly attributable expenses £7.2m £7.0m
Amortisation of insurance acquisition costs £16.8m £18.2m
Insurance service expense £174.5m £154.7m
Undiscounted reinsurance recoveries (£70.6m) (£21.5m)
Discounting ((1)) £16.0m £8.4m
Net insurance expense £119.9m £141.6m
Current accident year net loss ratio ((2)) 59.6% 58.2%
Impact of the development of prior accident years ((2)) (5.5%) 0.5%
Financial-year net loss ratio 54.1% 58.7%
Net loss ratio by product
Motor vehicle 50.5% 56.1%
Motorcycle 70.0% 58.6%
Taxi 88.0% 95.7%
Discounted ratios
Discounted financial-year net loss ratio 50.4% 55.4%
(1) Includes discounting on Period Payment Orders ("PPOs")
(2) Calculation of undiscounted net loss ratio allows for the impact of
discounting on long-term non-life annuities, Periodic Payment Orders ("PPOs"),
consistent with presentation under IFRS 4
The Group delivered excellent profitability in its core product in 2025, with
a 5.6ppts improvement in Motor loss ratio reflecting strong pricing in both
2024 and 2025 earning through. Performance of the Motorcycle business, which
being small is subject to natural volatility, improved significantly in the
second half of 2025 and delivered an acceptable result with strong
underwriting profitability expected to be shown over the medium term. The Taxi
loss ratio improved on 2024 and this product is being written in line with our
target margins. As with Motorcycle, this product will show big shifts in loss
ratio given the small size of the book.
There was a 5.5% favourable movement on prior-year reserves - a combination of
normal levels of IFRS risk adjustment run-off and some positive development of
prior years in 2025. The current-year loss ratio is in line with
our expectations and reflects our continued cautious view of inflation.
Overall, the financial-year loss ratio of 54.1% has allowed us to deliver a
net insurance margin of 19.2%, well within our target range.
Other operating expenditure
2025 2024
Employee expenses £18.2m £15.4m
IT expenses £6.9m £6.8m
Industry levies £5.7m £6.0m
Policy servicing costs £2.1m £3.2m
Other operating expenses £4.2m £3.9m
Before adjustment for directly attributable claims expenses £37.1m £35.3m
Reclassification of directly attributable claims expenses (£7.2m) (£7.0m)
Total operating expenses £29.9m £28.3m
Expense ratio 28.2% 25.5%
The significant proportion of variable cost within the business has meant that
the expense ratio has moved out by only 2.7ppts despite adverse operating
leverage given the 9.2% reduction in net earned premium in 2025 and ongoing
economic cost inflation.
In absolute terms, expenses (before adjustment for directly attributable
claims expenses) have increased by 5.1% during the year. This increase is
driven primarily by employee expenses. Since the prior year, employee numbers
have increased by approximately 3%, reflecting continued investment in the
business ahead of expected growth in 2026 and beyond. The average pay rise in
2025 was approximately 3.7% (including individual one-off salary increases).
Staff bonus costs incurred in 2025 - which were based on salaries paid in 2024
- increased due to relatively high pay rises given to staff in 2024. Employee
expenses also impacted by the increase in National Insurance from April 2025.
Other income
2025 2024
Interest revenue calculated using the effective interest method £11.7m £7.9m
Other technical income £0.6m £0.7m
Total interest and other income £12.3m £8.6m
2025 2024
Insurance finance expense from insurance contracts issued (£10.0m) (£8.4m)
Reinsurance finance income from reinsurance contracts held £4.2m £3.7m
Net insurance financial result (£5.8m) (£4.7m)
Other technical income, related to non-insurance revenue earned such as
product fees (excluding instalment interest) and commissions, remains a very
small element of the Group's income. Interest revenue reflects the yield
achieved across the Group's investment portfolio. The continued increase in
interest revenue reflects the higher yield gained through reinvesting matured
assets.
The Group's investment strategy remains unchanged, being invested in a
low-risk mix of UK Government bonds, other government-backed securities and
diversified investment-grade corporate bonds.
Fair value gains and losses are taken through other comprehensive income and
largely reflect market movements in the yields of risk-free and low-risk
assets. We do not expect to realise any of these market value movements
within profit, as we continue to hold invested assets to maturity.
Insurance and reinsurance finance income/(expense) reflects the run-off of
discounting applied to insurance liabilities under IFRS 17. As cash flows move
towards settlement, the total level of discounting is reduced and this
reduction is reflected here. The increase in 2025 reflects the discount rates
applied at the point claims were incurred and is a function of the run-off
patterns applied to claims costs when they are incurred.
Taxation
In 2025 the Group recorded a corporation tax expense of £13.0m (2024:
£12.6m), with an effective tax rate of 25.6%, (2024: 25.9%). The effective
tax rate is slightly higher than the current 25% rate of corporation tax in
the UK, reflecting the tax impact of the Group's employee share schemes. The
Group has not entered into any complex or unusual tax arrangements during the
year.
Earnings per share
2025 2024
Basic earnings per share 15.37p 14.48p
Diluted earnings per share 15.26p 14.37p
Basic earnings per share of 15.37p is largely proportionate to profit after
tax, with a slight improvement due to the reduction in total shares in issue
from 250.0m to 246.6m following the share buyback executed during the year.
Diluted earnings per share is similarly proportionate to profit after tax,
taking into account the potentially dilutive effect of the Group's share
schemes. No shares have been issued during the year.
Cash and investments
2025 2024
Government bonds £124.8m £112.8m
Government-backed securities £100.7m £103.3m
Corporate bonds £100.2m £95.1m
Cash and cash equivalents £25.5m £31.3m
Total cash and investment holdings have increased slightly, reflecting normal
variances in these balances throughout the year. The level of cash retained
reflects Sabre's normal liquidity requirements and there has been no change in
the overall investment strategy, with gilts and government-backed assets
remaining the majority of the portfolio, with c.30% of invested assets held in
investment-grade corporate bonds.
Insurance liabilities
2025 2024
Gross insurance liabilities £460.7m £397.9m
Reinsurance assets (£216.4m) (£160.8m)
Net insurance liabilities £244.3m £237.1m
The Group's net insurance liabilities continue to reflect the underlying
profitability and volume of business written. Generally, the gross insurance
liabilities are more volatile and impacted by the receipt and settlement of
individually large claims. The level of net insurance liabilities held remains
broadly proportionate to the volume of business written along with the
inflation applied to claims costs.
Leverage
The Group continues to hold no external debt. All of the Group's capital is
considered Tier 1 under the UK regulatory regime. The Directors continue to
hold the view that this allows the greatest operational flexibility for the
Group.
Dividends and solvency
2025 2024
Interim ordinary dividend (paid) 3.4p 1.7p
Final ordinary dividend (proposed) 8.9p 8.4p
Total ordinary dividend (paid and proposed) 12.3p 10.1p
Special dividend (proposed) 1.2p 2.9p
Total dividend for the year (paid and proposed) 13.5p 13.0p
The dividend proposed is in line with the Group's policy to pay an ordinary
dividend of 70% to 80% of profit after tax, and to consider passing excess
capital to shareholders by way of a special dividend. We also consider using
excess capital to fund a share buyback where this is considered to be
appropriate.
For 2025, the Group has announced a total ordinary dividend of 12.3p, 80% of
profit after tax, and a special dividend of 1.2p, taking the total dividend in
respect of 2025 to 13.5p (2024: 13.0p).
The Group's post-dividend SCR coverage ratio at 31 December 2025 is 161.5%
(2024: 171.1%).
We have announced this year that the Group intends to operate its second share
buyback programme, having completed the first in 2025. This is expected to
distribute an additional £5.0m of excess capital, subject to regulatory
approval. The Group's year-end post-dividend and post-buyback SCR coverage
ratio is 154.0%.
Adam Westwood
Chief Financial Officer
9 March 2026
Consolidated Profit or Loss Account
For the year ended 31 December 2025
Notes £'k £'k
Insurance revenue 217,990 248,131
Insurance service expense (174,491) (154,661)
Insurance service result before reinsurance contracts held 43,499 93,470
Reinsurance expense (23,872) (33,617)
Amounts recoverable from reinsurers for incurred claims 54,552 13,026
Net income/(expense) from reinsurance contracts held 30,680 (20,591)
Insurance service result 74,179 72,879
Interest income on financial assets using effective interest rate method 4.5 11,719 7,926
Realised gains on derecognition of debt securities measured at FVOCI 4.6 7 -
Total investment income 11,726 7,926
Insurance finance expense from insurance contracts issued 3.8 (9,968) (8,392)
Reinsurance finance income from reinsurance contracts held 3.8 4,236 3,714
Net insurance financial result (5,732) (4,678)
Net insurance and investment result 80,173 76,127
Other income 7 637 740
Other operating expenses 8 (29,850) (28,305)
Profit before tax 50,960 48,562
Income tax expense 10 (13,045) (12,601)
Profit for the year attributable to ordinary shareholders 37,915 35,961
Basic earnings per share (pence per share) 19 15.37 14.48
Diluted earnings per share (pence per share) 19 15.26 14.37
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2025
2025 2024
Notes £'k £'k
Profit for the year attributable to ordinary shareholders 37,915 35,961
Items that are or may be reclassified subsequently to Profit or Loss
Unrealised fair value gains on debt securities 4.6 5,525 3,774
Realised gains on derecognition of debt securities reclassified to Profit or 4.6 (7) -
Loss
Tax charge (1,381) (944)
Debt securities at fair value through Other Comprehensive Income 4,137 2,830
Insurance finance (expense)/income from insurance contracts issued 3.8 (5,808) 6,852
Reinsurance finance income/(expense) from reinsurance contracts held 3.8 2,856 (5,880)
Tax credit 738 395
Net insurance financial result (2,214) 1,367
Total other comprehensive income for the year, net of tax 1,923 4,197
Total comprehensive income for the year attributable to ordinary shareholders 39,838 40,158
Consolidated Statement of Financial Position
As at 31 December 2025
2025 2024
Notes £'k £'k
Assets
Cash and cash equivalents 4.1 25,475 31,314
Debt securities at fair value through Other Comprehensive Income 4.2 325,752 311,184
Receivables 4.3 41 32
Current tax assets 209 997
Reinsurance contract assets 3.1 216,382 160,758
Property, plant and equipment 9 4,278 4,204
Deferred tax assets 11 82 265
Other assets 13 799 778
Goodwill 14 156,279 156,279
Total assets 729,297 665,811
Liabilities
Payables 5 7,048 6,995
Insurance contract liabilities 3.1 460,682 397,924
Other liabilities 3,705 2,546
Total liabilities 471,435 407,465
Equity
Issued share capital 15 247 250
Own shares 15, 17 (3,354) (3,112)
Merger reserve 17 48,525 48,525
FVOCI reserve 17 1,073 (3,064)
Insurance/Reinsurance finance reserve 17 1,392 3,606
Share-based payments reserve 17 3,495 2,620
Retained earnings 206,484 209,521
Total equity 257,862 258,346
Total liabilities and equity 729,297 665,811
Consolidated Statement of Changes in Equity
For the year ended 31 December 2025
Share capital Own shares Merger reserve FVOCI reserve Insurance/ Share-based payments reserve Retained earnings Total equity
Reinsurance
finance reserve
Notes £'k £'k £'k £'k £'k £'k £'k £'k
Balance as at 1 January 2024 250 (3,121) 48,525 (5,894) 2,239 2,686 197,727 242,412
Profit for the year attributable to ordinary shareholders - - - - - - 35,961 35,961
Total other comprehensive income for the year, net of tax: Items that are or - - - 2,830 1,367 - - 4,197
may be reclassified subsequently to Profit or Loss
Total comprehensive income/(expense) for the year - - - 2,830 1,367 - 35,961 40,158
Share-based payment expense - - - - - (66) 182 116
Net movement in own shares - 9 - - - - - 9
Dividends paid - - - - - - (24,349) (24,349)
Balance as at 31 December 2024 250 (3,112) 48,525 (3,064) 3,606 2,620 209,521 258,346
Profit for the year attributable to ordinary shareholders - - - - - - 37,915 37,915
Total other comprehensive income for the year, net of tax: Items that are or - - - 4,137 (2,214) - - 1,923
may be reclassified subsequently to Profit or Loss
Total comprehensive income/(expense) for the year - - - 4,137 (2,214) - 37,915 39,838
Share-based payment expense - - - - - 875 450 1,325
Net movement in own shares - (242) - - - - - (242)
Share buyback 15 (3) - - - - - (5,064) (5,067)
Dividends paid - - - - - - (36,338) (36,338)
Balance as at 31 December 2025 247 (3,354) 48,525 1,073 1,392 3,495 206,484 257,862
Consolidated Statement of Cash Flows
For the year ended 31 December 2025
2025 2024
Notes £'k £'k
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year 50,960 48,562
Adjustments for:
Depreciation of property, plant and equipment 9 179 184
Share-based payment - equity-settled schemes 16 2,142 1,607
Investment return (10,589) (6,458)
Expected credit loss 4.4 3 5
Operating cash flows before movements in working capital 42,695 43,900
Movements in working capital:
Change in receivables (9) 55
Change in reinsurance contract assets (52,768) 88
Change in other assets (21) (4)
Change in payables 53 (2,705)
Change in insurance contract liabilities 56,950 29,937
Change in other liabilities 1,159 (641)
Cash generated from operating activities before investment of insurance assets 48,059 70,630
Taxes paid (12,717) (12,286)
Net cash generated from operating activities before investment of insurance 35,342 58,344
assets
Interest and investment income received 8,484 5,248
Proceeds from the sale and maturity of invested assets 93,465 98,656
Purchases of invested assets (100,412) (140,180)
Net cash generated from operating activities 36,879 22,068
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment 9 (253) -
Net cash used by investing activities (253) -
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash used in acquiring and disposing of own shares (1,069) (1,484)
Options exercised under share option schemes 9 -
Share buyback 15 (5,067) -
Dividends paid 12 (36,338) (24,349)
Net cash used by financing activities (42,465) (25,833)
Net decrease in cash and cash equivalents (5,839) (3,765)
Cash and cash equivalents at the beginning of the year 31,314 35,079
Cash and cash equivalents at the end of the year 25,475 31,314
Notes to the Consolidated Financial Statements
For the year ended 31 December 2025
Corporate information
Sabre Insurance Group plc is a company incorporated in the United Kingdom and
registered in England and Wales. The address of the registered office is Sabre
House, 150 South Street, Dorking, Surrey, RH4 2YY, England. The nature of the
Group's operations is the writing of general insurance for motor vehicles,
including taxis and motorcycles. The Company's principal activity is that of a
holding company.
1. Accounting Policies
The principal accounting policies applied in the preparation of these
Consolidated and Company Financial Statements are included in the specific
notes to which they relate. These policies have been consistently applied to
all the years presented, unless otherwise indicated.
1.1. Basis of preparation
The financial statements of the Group have been prepared in accordance with
UK-adopted international accounting standards, comprising International
Accounting Standards ("IAS") and International Financial Reporting Standards
("IFRS"), and the requirements of the Companies Act 2006. Endorsement of
accounting standards is granted by the UK Endorsement Board ("UKEB").
The financial statements are prepared in accordance with the going concern
principle using the historical cost basis, except for those financial assets
and owner-occupied properties that have been measured at fair value. The
preparation of the financial statements necessitates the use of estimates,
assumptions and judgements that affect the reported amounts in the Statement
of Financial Position and the Profit or Loss Account and Statement of
Comprehensive Income. Where appropriate, details of estimates are presented in
the accompanying notes to the Consolidated Financial Statements.
As the full impact of climate change is currently unknown, it is not possible
to consider all possible future outcomes when determining the value of assets,
liabilities and the timing of future cash flows. The Group's view is that any
reasonable impact of climate change would not have a material impact on the
valuation of assets and liabilities at the year-end date.
The financial statements values are presented in pounds sterling (£) rounded
to the nearest thousand (£'k), unless otherwise indicated.
The Group presents its Statement of Financial Position broadly in order of
liquidity. An analysis regarding recovery or settlement within 12 months after
the reporting date (current) and more than 12 months after the reporting date
(non-current) is presented in the respective notes.
Financial assets and financial liabilities are offset and the net amount
reported in the Statement of Financial Position only when there is a legally
enforceable right to offset the recognised amounts and there is an intention
to settle on a net basis, or to realise the assets and settle the liability
simultaneously.
1.2. Going concern
The Consolidated Financial Statements have been prepared on a going concern
basis. The Directors have a reasonable expectation that the Group has adequate
resources to continue in operation for at least 12 months from the date the
Directors approved these Financial Statements and that therefore it is
appropriate to adopt a going concern basis for the preparation of the
Financial Statements. In making their assessment, the Directors took into
account the potential impact of the principal risks that could prevent the
Group from achieving its strategic objectives.
The assessment was based on the Group's Own Risk and Solvency Assessment
("ORSA"), which brings together management's view of current and emerging
risks, with scenario-based analysis and reverse stress testing to form a
conclusion as to the financial stability of the Group.
Consideration was also given to what the Group considers its principal risks
which are set out in the Principal Risks and Uncertainties section on pages 22
to 30 of the Strategic Report in the 2026 Annual Report and Accounts. The
assessment also included consideration of any scenarios which might cause the
Group to breach its solvency requirements which are not otherwise covered in
the risk-based scenario testing.
We have assessed the short-, medium- and long-term risks associated with
climate change. Given the geographical diversity of the Group's policyholders
within the UK, and the Group's reinsurance programme, it is highly unlikely
that a climate event will materially impact Sabre's ability to continue
trading. More likely is that the costs associated with the transition to a
low-carbon economy will impact the Group's indemnity spend, as electric
vehicles are currently relatively expensive to fix. We expect that this is
somewhat, or perhaps completely, offset by advances in technology reducing the
frequency of claims, in particular bodily injury claims which are generally
far more expensive than damage to vehicles. These changes in the costs of
claims are gradual and as such reflected in our claims experience and fed into
the pricing of our policies.
1.3. New and amended standards and interpretations adopted by the Group
Amendments to IFRS
The following amended IFRS standards became effective for the year ended 31
December 2025:
Amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates": "Lack
of Exchangeability"
None of the amendments have had a material impact on the Group.
1.4. New and amended standards and interpretations not yet effective in 2025
A number of new standards and interpretations adopted by the UK which are not
mandatorily effective, as well as standards' interpretations issued by the
IASB but not yet adopted by the UK, have not been applied in preparing these
financial statements. The Group does not plan to adopt these standards early;
instead, it expects to apply them from their effective dates as determined by
their dates of UK endorsement. These standards are not expected to have a
significant impact on the results within the financial statements.
Annual improvements to IFRS - Volume 11 (effective 1 January 2026). Annual
improvements are limited to changes that either clarify the wording in an
Accounting Standard or correct relatively minor unintended consequences,
oversights or conflicts between the requirements in the Accounting Standards.
This includes minor clarifications to IFRS 7 "Financial Instruments:
Disclosures", IFRS 9 "Financial Instruments", IFRS 10 "Consolidated Financial
Statements", and IAS 7 "Statement of Cash Flows".
IFRS 18 "Presentation and Disclosure in Financial Statements" - Effective 1
January 2027, with retrospective application - IFRS 18, which replaces IAS 1
"Presentation of Financial Statements", introduces new requirements for
presentation and disclosure in the financial statements, with a focus on the
Profit or Loss Account. Items in the Profit or Loss Account will be classified
into one of five categories: operating, investing, financing, income taxes and
discontinued operations, of which the first three are new. It also requires
the disclosure of newly defined management-derived performance measures, how
these are calculated and why these provide useful information, reconciled to
the IFRS reporting. As a presentation and disclosure standard, the
implementation of IFRS 18 will not affect the Group's results. The Group is
currently working to identify all impacts the amendments will have on the
primary financial statements and notes to the financial statements.
Amendment to IFRS 9 and IFRS 7 (effective 1 January 2026). These amendments
clarify the requirements for the timing of recognition and derecognition of
some financial assets and liabilities, clarify and add further guidance for
assessing whether a financial asset meets the solely payments of principal and
interest ("SPPI") criterion, add new disclosures for certain instruments with
contractual terms that can change cash flows and make updates to the
disclosures for equity instruments designated at Fair Value through Other
Comprehensive Income ("FVOCI").
IFRS 19 "Subsidiaries without Public Accountability: Disclosures" (effective 1
January 2027). This new standard reduces the disclosure requirements for
subsidiaries while maintaining the usefulness of the information for users of
their financial statements. Subsidiaries are eligible to apply IFRS 19 if they
do not have public accountability and their parent company applies IFRS in
their consolidated financial statements. As the principal subsidiary of the
Group is a public interest entity, the Group does not expect any significant
impact from IFRS 19.
2. Risk and Capital Management
2.1. Risk management framework
The Sabre Insurance Group plc Board is responsible for prudent oversight of
the Group's business and financial operations, ensuring that they are
conducted in accordance with sound business principles and with applicable
laws and regulations, and ensure fair customer outcomes. This includes
responsibility to articulate and monitor adherence to the Board's appetite for
exposure to all risk types. The Board also ensures that measures are in place
to provide independent and objective assurance on the effective identification
and management of risk and on the effectiveness of the internal controls in
place to mitigate those risks.
The Board has set a robust risk management strategy and framework as an
integral element in its pursuit of business objectives and in the fulfilment
of its obligations to shareholders, regulators, customers and employees.
The Group's risk management framework is proportionate to the risks that we
face. Our assessment of risk is not static; we continually reassess the risk
environment in which the Group operates and ensure that we maintain
appropriate mitigation in order to remain within our risk appetite. The
Group's Management Risk and Compliance Forum gives management the regular
opportunity to review and discuss the risks which the Group faces, including
but not limited to any breaches, issues or emerging risks. The Forum also
works to ensure that adequate mitigation for the risks the Group is exposed to
are in place.
2.2. Underwriting risk
The principal risk the Group faces under insurance contracts is that the
actual claims and benefit payments, or the timing thereof, differ from
expectations. This is influenced by the frequency of claims, severity of
claims, actual benefits paid and subsequent development of long-term claims.
Therefore, the objective of the Group is to ensure that sufficient reserves
are available to cover these liabilities.
The Group issues only motor insurance contracts, which usually cover a
12-month duration. For these contracts, the most significant risks arise from
under-estimation of the expected costs attached to a policy or a claim, for
example through unexpected inflation of costs or single catastrophic events.
Refer to Note 3.6 for detail on these risks and the way the Group manages
them. Note 3.6 also includes the considerations of climate change. Further
discussion on climate change can be found in the Principal Risks and
Uncertainties section on pages 22 to 30 of the Strategic Report and the
Responsibility and Sustainability section on pages 41 to 67 of the 2026 Annual
Report and Accounts.
2.3. Credit risk
Credit risk reflects the financial impact of the default of one or more of the
Group's counterparties. The Group is exposed to financial risks caused by a
loss in the value of financial assets due to counterparties failing to meet
all or part of their obligations. Key areas where the Group is exposed to
credit default risk are:
‒ Failure of an asset counterparty to meet their financial
obligations (Note 4.4)
‒ Reinsurers default on their share of the Group's insurance
liabilities (Note 3.7)
‒ Default on amounts due from insurance contract
intermediaries or policyholders (Note 3.7)
2.3. Credit risk
Credit risk reflects the financial impact of the default of one or more of the
Group's counterparties. The Group is exposed to financial risks caused by a
loss in the value of financial assets due to counterparties failing to meet
all or part of their obligations. Key areas where the Group is exposed to
credit default risk are:
‒ Failure of an asset counterparty to meet their financial
obligations (Note 4.4)
‒ Reinsurers default on their share of the Group's insurance
liabilities (Note 3.7)
‒ Default on amounts due from insurance contract
intermediaries or policyholders (Note 3.7)
The following policies and procedures are in place to mitigate the Group's
exposure to credit risk:
‒ A Group credit risk policy which sets out the assessment
and determination of what constitutes credit risk for the Group. Compliance
with the policy is monitored and exposures and breaches are reported to the
Group's Risk Committee
‒ Reinsurance is placed with counterparties that have a good
credit rating and concentration of risk is avoided by following policy
guidelines in respect of counterparties' limits that are set each year by the
Board of Directors and are subject to regular reviews. At each reporting date,
management performs an assessment of creditworthiness of reinsurers and
updates the reinsurance purchase strategy, ascertaining a suitable allowance
for impairment
‒ The Group sets the maximum amounts and limits that may be
advanced to corporate counterparties by reference to their long-term
credit ratings
‒ The credit risk in respect of customer balances incurred
on non-payment of premiums or contributions will only persist during the grace
period specified in the policy document or trust deed until expiry, when the
policy is either paid up or terminated. Commission paid to intermediaries is
netted off against amounts receivable from them to reduce the risk of doubtful
debts
Refer to Notes 3.7 and 4.4 as indicated above for further information on
credit risk.
2.4. Liquidity risk
Liquidity risk is the potential that obligations cannot be met as they fall
due as a consequence of having a timing mismatch or inability to raise
sufficient liquid assets without suffering a substantial loss on realisation.
The Group manages its liquidity risk through both ensuring that it holds
sufficient cash and cash equivalent assets to meet all short-term liabilities,
and matching the maturity profile of its financial investments to the expected
cash outflows.
Refer to Note 6 for further information on liquidity risk.
2.5. Investment concentration risk
Excessive exposure to particular industry sectors or groups can give rise to
concentration risk. The Group has no significant investment in any particular
industrial sector and therefore is unlikely to suffer significant losses
through its investment portfolio as a result of over-exposure to sectors
engaged in similar activities or which have similar economic features that
would cause their ability to meet contractual obligations to be similarly
affected by changes in economic, political or other conditions.
A significant part of the Group's investment portfolio consists primarily of
UK government bonds and government-backed bonds; therefore, the risk of
government default does exist, however, the likelihood is extremely remote.
The remainder of the portfolio consists of investment grade corporate bonds.
The Group continues to monitor the strength and security of all bonds.
The Group's portfolio has a significant concentration of UK debt securities
and therefore is exposed to movements in UK interest rates.
Refer to Note 4.2.1 for further information on investment concentration risk.
2.6. Operational risk
Operational risk is the risk of loss arising from system failure, cyber
attack, human error, fraud or external events. When controls fail to perform,
operational risks can cause damage to reputation, have legal or regulatory
implications or can lead to financial loss. The Group cannot expect to
eliminate all operational risks, but by operating a rigorous control framework
and by monitoring and responding to potential risks, the Group is able to
manage the risks. Controls include effective segregation of duties, access
controls, authorisation and reconciliation procedures, staff education and
assessment processes, including the use of internal audit. Business risks such
as changes in environment, technology and the industry are monitored through
the Group's strategic planning and budgeting process.
2.7. Capital management
The Board of Directors has ultimate responsibility for ensuring that the Group
has sufficient funds to meet its liabilities as they fall due. The Group
carries out detailed modelling of its assets and liabilities, and the key
risks to which these are exposed. This modelling includes the Group's own
assessment of its capital requirements for solvency purposes.
The Group has continued to manage its solvency with reference to the solvency
capital requirement ("SCR") calculated using the standard formula. The Group
has developed sufficient processes to ensure that the capital requirements
under Solvency II are not breached, including the maintenance of capital at a
level higher than that required through the standard formula. The Group
considers its capital position to be its net assets on a Solvency II basis and
monitors this in the context of the Solvency II SCR.
The Group aims to retain sufficient capital such that in all reasonably
foreseeable scenarios, it will hold regulatory capital in excess of its SCR.
The Directors currently consider that this is achieved through maintaining a
regulatory capital surplus of 140% to 160%. As at 31 December 2025, the Group
holds significant excess Solvency II capital.
The Group's IFRS capital comprised:
As at 31 December
2025 2024
£'k £'k
Share capital 247 250
Own shares (3,354) (3,112)
Merger reserve 48,525 48,525
FVOCI reserve 1,073 (3,064)
Insurance/Reinsurance finance reserve 1,392 3,606
Share-based payments reserve 3,495 2,620
Retained earnings 206,484 209,521
Total 257,862 258,346
The Solvency II position of the Group both before and after proposed final
dividend is given below:
As at 31 December
2025 2024
£'k £'k
Total tier 1 capital - pre-dividend 133,080 134,695
SCR 66,986 62,199
Solvency coverage ratio (%) - pre-dividend 198.7% 216.6%
As at 31 December
2025 2024
£'k £'k
Total tier 1 capital - pre-dividend 133,080 134,695
Less: Final dividend declared (24,907) (28,250)
Total tier 1 capital - post-dividend 108,173 106,445
SCR 66,986 62,199
Solvency coverage ratio (%) 161.5% 171.1%
The following table sets out a reconciliation between IFRS net assets and
Solvency II net assets before proposed final dividend:
As at 31 December
2025 2024
£'k £'k
IFRS net assets 257,862 258,346
Less: Goodwill (156,279) (156,279)
Adjusted IFRS net assets 101,583 102,067
Remove IFRS liability: Liability for remaining coverage (unearned premium 105,596 117,245
element)
Remove IFRS asset: Insurance acquisition cash flow asset (7,789) (8,472)
Remove IFRS liability: Risk adjustment 15,773 14,304
Add Solvency II liability: Risk margin (7,440) (6,975)
Add Solvency II liability: Premium provision (63,276) (74,613)
Changes in valuation differences of technical reserves between IFRS and (867) 2,015
Solvency II
Change in deferred tax liability due to difference in net asset position (10,500) (10,876)
Solvency II net assets 133,080 134,695
The adjustments set out in the above table have been made for the following
reasons:
‒ Adjusted IFRS net assets: Equals Group net assets on an
IFRS basis, less Goodwill.
‒ Removal of liability for remaining coverage and insurance
acquisition cash flow asset: Liability for remaining coverage is not treated
as a liability under Solvency II.
‒ Removal of insurance acquisition cash flow asset:
Insurance acquisition cash flow asset is not deferred under Solvency II.
‒ Removal of IFRS risk adjustment: Solvency II risk margin
replaces IFRS risk adjustment.
‒ Addition of Solvency II risk margin: The Solvency II risk
margin represents the premium that would be required were the Group to
transfer its technical provisions to a third party, and essentially reflects
the SCR required to cover run-off of claims on existing business. This amount
is calculated by the Group through modelling the discounted SCR on a projected
future balance sheet for each year of claims run-off.
‒ Addition of Solvency II premium provision: A premium
reserve reflecting the future cash flows in respect of insurance contracts is
calculated and this must be discounted under Solvency II.
‒ Changes in valuation differences: Valuation differences of
technical differences between IFRS 17 and Solvency II, including discounting.
‒ Change in deferred tax: As the move to a Solvency II basis
balance sheet increases the net asset position of the Group, a deferred tax
liability is generated to offset the increase.
Sabre Insurance Group plc's SCR, expressed on a risk module basis, is set out
in the following table:
As at 31 December
2025 2024
£'k £'k
Interest rate risk 4,149 5,289
Equity risk - -
Property risk 900 900
Spread risk 4,691 3,109
Currency risk 888 584
Concentration risk - -
Correlation impact (3,602) (3,226)
Market risk 7,026 6,656
Counterparty risk 4,333 3,325
Underwriting risk 70,928 68,011
Correlation impact (7,311) (6,678)
Basic SCR 74,976 71,314
Operating risk 10,754 8,714
Loss-absorbing effect of deferred taxes (18,744) (17,829)
Total SCR 66,986 62,199
The total SCR is primarily driven by the underwriting risk element, which is a
function of the Group's net earned premium (or projected net earned premium)
and the level of reserves held. Therefore, the SCR is broadly driven by the
size of the business.
The Group's capital management objectives are:
‒ To ensure that the Group will be able to continue as a
going concern
‒ To maximise the income and capital return to its equity
The Board monitors and reviews the broad structure of the Group's capital on
an ongoing basis. This review includes consideration of the extent to which
revenue in excess of that which is required to be distributed should be
retained.
The Group's objectives, policies and processes for managing capital have not
changed during the year.
3. Insurance Liabilities and Reinsurance Assets
ACCOUNTING POLICY
For the purpose of this accounting policy, the term 'motor insurance' covers
all the Group's products, which includes Motor Vehicle, Motorcycle and Taxi
insurance.
A. Insurance and reinsurance contracts classification
The Group issues insurance contracts in the normal course of business, under
which it accepts significant insurance risk from a policyholder
by agreeing to compensate the policyholder if a specified uncertain future
insured event adversely affects the policyholder.
As a general guideline, the Group determines whether it has significant
insurance risk, by comparing benefits payable after an insured event with
benefits payable if the insured event did not occur.
The Group issues only non-life insurance to individuals and businesses.
Non-life insurance products offered by the Group are Motor Vehicle, Motorcycle
and Taxi insurance. These products offer protection of a policyholder's assets
and indemnification of other parties that have suffered damage as a result of
a policyholder's accident.
In the normal course of business, the Group uses reinsurance to mitigate its
risk exposures. A reinsurance contract transfers significant risks if
it transfers substantially all of the insurance risk resulting from the
insured portion of the underlying insurance contracts, even if it does not
expose the reinsurer to the possibility of a significant loss.
B. Insurance and reinsurance contracts accounting treatment
(i) Separating components from insurance and reinsurance contracts
The Group assesses its non-life insurance and reinsurance products to
determine whether they contain distinct components which must be accounted for
under another IFRS instead of under IFRS 17. After separating any distinct
components, the Group applies IFRS 17 to all remaining components of the
(host) insurance contract. Currently, the Group's products do not include any
distinct components that require separation.
(ii) Aggregation and recognition of insurance and reinsurance contracts
Insurance contracts
Insurance contracts are aggregated into groups for measurement purposes.
Groups of insurance contracts are determined by identifying portfolios of
insurance contracts, each comprising contracts subject to similar risks and
managed together, and dividing each portfolio into annual cohorts (i.e. by
year of issue) and each annual cohort into three groups based on the expected
profitability of contracts:
‒ Any contracts that are onerous on initial recognition
‒ Any contracts that, on initial recognition, have no
significant possibility of becoming onerous subsequently
‒ Any remaining contracts in the annual cohort
The Group recognises groups of insurance contracts it issues from the earliest
of:
‒ The beginning of the coverage period of the group of
contracts
‒ When the first payment from a policyholder in the group
becomes due or when the first payment is received if there is no due date
‒ When facts and circumstances indicate that the contract is
onerous
The Group adds new contracts to the group in the reporting period in which
that contract meets one of the criteria set out above.
The profitability of groups of contracts is assessed by actuarial valuation
models that take into consideration existing and new business. The Group
assumes that no contracts in the portfolio are onerous at initial recognition
unless facts and circumstances indicate otherwise. For contracts that are not
onerous, the Group assesses, at initial recognition, that there is no
significant possibility of becoming onerous subsequently by assessing the
likelihood of changes in applicable facts and circumstances. The Group
considers facts and circumstances to identify whether a group of contracts are
onerous based on:
‒ Pricing information
‒ Results of similar contracts it has recognised
‒ Environmental factors, e.g. a change in market experience
or regulations
Reinsurance contracts
Some reinsurance contracts provide cover for underlying contracts that are
included in different groups. However, the Group concludes that the
reinsurance contract's legal form of a single contract reflects the substance
of the Group's contractual rights and obligations, considering that the
different covers lapse together and are not sold separately. As a result, the
reinsurance contract is not separated into multiple insurance components that
relate to different underlying groups.
The Group recognises a group of reinsurance contracts held at the earlier of
the following:
‒ The beginning of the coverage period of the group of
reinsurance contracts held
‒ The date the Group recognises an onerous group of
underlying insurance contracts if the Group entered into the related
reinsurance contract held in the group of reinsurance contracts held at or
before that date
The Group adds new contracts to the group in the reporting period in which
that contract meets one of the criteria set out above.
(iii) Measurement
Summary of measurement approaches
The Group uses the following measurement approaches to its insurance and
reinsurance contracts.
Product classification Measurement model
Insurance contracts issued
Motor insurance Insurance contracts issued Premium Allocation Approach ("PAA")
Reinsurance contracts held
Motor insurance - excess of loss reinsurance Reinsurance contracts held Premium Allocation Approach ("PAA")
The Group applies the premium allocation approach to all the insurance
contracts that it issues and reinsurance contracts that it holds, as the
coverage period of each contract in the group is one year or less, including
insurance contract services arising from all premiums within the contract
boundary. The Group does not expect significant variability in the fulfilment
cash flows that would affect the measurement of the liability for remaining
coverage during the period before a claim is incurred.
All the Group's insurance contracts have a coverage period of one year or
less. The Group's reinsurance contracts held are excess of loss contracts and
are loss occurring. The Group does not issue any reinsurance contracts.
Insurance contracts issued
On initial recognition of each group of contracts, the carrying amount of the
liability for remaining coverage ("LRC") is measured at:
‒ The premiums received on initial recognition
‒ Minus any insurance acquisition cash flows allocated to
the group at that date
‒ Adjusted for any amount arising from the derecognition of
any assets or liabilities previously recognised for cash flows related to the
group (including assets for insurance acquisition cash flows)
The Group has chosen not to expense insurance acquisition cash flows when they
are incurred.
Subsequently, the Group measures the carrying amount of the LRC at the end of
each reporting period as the LRC at the beginning of the period:
‒ Plus premiums received in the period
‒ Minus insurance acquisition cash flows
‒ Plus any amounts relating to the amortisation of insurance
acquisition cash flows recognised as an expense in the reporting period
‒ Minus the amount recognised as insurance revenue for the
services provided in the period
On initial recognition of each group of contracts, the Group expects that the
time between providing each part of the services and the related premium due
date is no more than a year. Accordingly, the Group has chosen not to adjust
the liability for remaining coverage to reflect the time value of money and
the effect of financial risk.
If at any time during the coverage period, facts and circumstances indicate
that a group of contracts is onerous, then the Group recognises a loss in
Profit or Loss and increases the liability for remaining coverage to the
extent that the current estimates of the fulfilment cash flows that relate to
remaining coverage exceed the carrying amount of the liability for remaining
coverage. The fulfilment cash flows are discounted (at current rates) if the
liability for incurred claims is also discounted.
The Group recognises the liability for incurred claims ("LIC") of a group of
insurance contracts at the amount of the fulfilment cash flows ("FCF")
relating to incurred claims. The fulfilment cash flows are discounted (at
current rates) unless they are expected to be paid in one year or less from
the date the claims are incurred.
The carrying amount of a group of insurance contracts issued at the end of
each reporting period is the sum of:
‒ The LRC
‒ The LIC
Risk adjustment for non-financial risk
An explicit risk adjustment for non-financial risk is estimated separate from
the other estimates. Unless contracts are onerous, the explicit risk
adjustment for non-financial risk is only estimated for the measurement of the
LIC.
This risk adjustment represents the compensation that the Group requires for
bearing the uncertainty about the amount and timing of cash flows that arise
from non-financial risk. Non-financial risk is risk arising from insurance
contracts other than financial risk, which is included in the estimates of
future cash flows or the discount rate used to adjust the cash flows. The
risks covered by the risk adjustment for non-financial risk are insurance risk
and other non-financial risks such as lapse risk and expense risk.
The risk adjustment for non-financial risk for insurance contracts measures
the compensation that the Group would require to make it indifferent between:
‒ Fulfilling a liability that has a range of possible
outcomes arising from non-financial risk
‒ Fulfilling a liability that will generate fixed cash flows
with the same expected present value as the insurance contracts
Reinsurance contracts held
The excess of loss reinsurance contracts held provide coverage on the motor
insurance contracts originated for claims incurred during an accident year and
are accounted for under the PAA. The Group measures its reinsurance assets for
a group of reinsurance contracts that it holds on the same basis as insurance
contracts that it issues. For reinsurance contracts held, on initial
recognition, the Group measures the remaining coverage at the amount of ceding
premiums paid. For reinsurance contracts held, at each of the subsequent
reporting dates, the remaining coverage is:
‒ Increased for ceding premiums paid in the period
‒ Decreased for the amounts of ceding premiums recognised as
reinsurance expenses for the services received in the period
Assets for reinsurance contracts consist of the asset for remaining coverage
("ARC") and the asset for incurred claims ("AIC") being the reinsurers' share
of claims that have already been incurred.
For reinsurance contracts held, the risk adjustment for non-financial risk
presents the amount of risk being transferred by the Group to the reinsurer.
Asset for insurance acquisition cash flows
The Group includes the following acquisition cash flows within the insurance
contract boundary that arise from selling, underwriting and starting a group
of insurance contracts and that are:
a. Costs directly attributable to individual contracts and groups of contracts
b. Costs directly attributable to the portfolio of insurance contracts to
which the group belongs, which are allocated on a reasonable and consistent
basis to measure the group of insurance contracts
Insurance acquisition cash flows arising before the recognition of the related
group of contracts are recognised as an asset. Insurance acquisition cash
flows arise when they are paid or when a liability is required to be
recognised under a standard other than IFRS 17. Such an asset is recognised
for each group of contracts to which the insurance acquisition cash flows are
allocated. The asset is derecognised, fully or partially, when the insurance
acquisition cash flows are included in the measurement of the group of
contracts.
Recoverability assessment
At each reporting date, if facts and circumstances indicate that an asset for
insurance acquisition cash flows may be impaired, then the Group:
a. Recognises an impairment loss in Profit or Loss so that the carrying amount
of the asset does not exceed the expected net cash inflow for the related
group
b. If the asset relates to future renewals, recognises an impairment loss in
Profit or Loss to the extent that it expects those insurance acquisition cash
flows to exceed the net cash inflow for the expected renewals and this excess
has not already been recognised as an impairment loss under (a)
The Group reverses any impairment losses in Profit or Loss and increases the
carrying amount of the asset to the extent that the impairment conditions have
improved.
Modification and derecognition
The Group derecognises insurance contracts when:
‒ The contract is extinguished (i.e. when the obligation
specified in the insurance contract expires or is discharged or cancelled)
‒ The contract is modified and certain additional criteria
are met
When an insurance contract is modified by the Group as a result of an
agreement with the counterparties or due to a change in regulations, the Group
treats changes in cash flows caused by the modification as changes in
estimates of the FCF, unless the conditions for the derecognition of the
original contract are met. The Group derecognises the original contract and
recognises the modified contract as a new contract if any of the following
conditions are present:
a. If the modified terms had been included at contract inception and the Group
would have concluded that the modified contract:
i. Is not in scope of IFRS 17
ii. Results in different separable components
iii. Results in a different contract boundary
iv. Belongs to a different group of contracts
b. The original contract was accounted for under the PAA, but the modification
means that the contract no longer meets the eligibility criteria for that
approach
When an insurance contract accounted for under the PAA is derecognised,
adjustments to the FCF to remove relating rights and obligations, and account
for the effect of the derecognition result in the following amounts being
charged immediately to Profit or Loss:
a. If the contract is extinguished, any net difference between the
derecognised part of the LRC of the original contract and any other cash flows
arising from extinguishment
b. If the contract is transferred to the third party, any net difference
between the derecognised part of the LRC of the original contract and the
premium charged by the third party
c. If the original contract is modified resulting in its derecognition, any
net difference between the derecognised part of the LRC and the hypothetical
premium the entity would have charged had it entered into a contract with
equivalent terms as the new contract at the date of the contract modification,
less any additional premium charged for the modification
(iv) Presentation
The Group has presented separately, in the Statement of Financial Position,
the carrying amount of portfolios of insurance contracts issued and portfolios
of reinsurance contracts held.
The Group has elected to disaggregate part of the movement in LIC resulting
from the changes in discount rates and present this in the Statement of
Comprehensive Income. The Group disaggregates the total amount recognised in
the Profit or Loss Account and the Statement of Comprehensive Income into an
insurance service result, comprising insurance revenue and insurance service
expense, and insurance finance income or expenses.
The Group does not disaggregate the change in risk adjustment for
non-financial risk between a financial and non-financial portion and includes
the entire change as part of the insurance service result.
The Group separately presents income or expenses from reinsurance contracts
held from the expenses or income from insurance contracts issued.
AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS
Insurance service result from insurance contracts issued
Insurance revenue
As the Group provides insurance contract services under the group of insurance
contracts, it reduces the LRC and recognises insurance revenue. The amount of
insurance revenue recognised in the reporting period depicts the transfer of
promised services at an amount that reflects the portion of consideration that
the Group expects to be entitled to in exchange for those services.
The Group measures all insurance contracts under the PAA and recognises
insurance revenue based on the passage of time over the coverage period of a
group of contracts.
Insurance service expenses
Insurance service expenses include the following:
‒ Incurred claims and benefits
‒ Other incurred directly attributable expenses
‒ Amortisation of insurance acquisition cash flows
‒ Changes that relate to past service - changes in the FCF
relating to the LIC
‒ Changes that relate to future service - changes in the FCF
that result in onerous contract losses or reversals of those losses
Amortisation of insurance acquisition cash flows is based on the passage of
time.
Other expenses not meeting the above categories are included in other
operating expenses in the Profit or Loss Account.
Insurance service result from reinsurance contracts held
Net income/(expense) from reinsurance contracts held
The Group presents separately on the face of the Profit or Loss Account and
the Statement of Comprehensive Income, the amounts expected to be recovered
from reinsurers, and an allocation of the reinsurance premiums paid. The net
income/(expense) from reinsurance contracts held comprise:
‒ Reinsurance expenses
‒ For groups of reinsurance contracts measured under the
PAA, broker fees are included within reinsurance expenses
‒ Incurred claims recovery
‒ Other incurred directly attributable expenses
‒ Changes that relate to past service - changes in the FCF
relating to incurred claims recovery
‒ Effect of changes in the risk of reinsurers'
non-performance
‒ Amounts relating to accounting for onerous groups of
underlying insurance contracts issued
Reinsurance expenses are recognised similarly to insurance revenue. The amount
of reinsurance expenses recognised in the reporting period depicts the
transfer of received insurance contract services at an amount that reflects
the portion of ceding premiums that the Group expects to pay in exchange for
those services. Broker fees are included in reinsurance expenses.
All groups of reinsurance contracts held are measured under the PAA and
reinsurance expenses are recognised based on the passage of time over the
coverage period of a group of contracts.
AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Insurance finance income or expenses
Insurance finance income or expenses comprise the change in the carrying
amount of the group of insurance contracts arising from:
‒ The effect of the time value of money and changes in the
time value of money
‒ The effect of financial risk and changes in financial risk
For contracts measured under the PAA, the main amounts within insurance
finance income or expenses are:
a. Interest accreted on the LIC
b. The effect of changes in interest rates and other
financial assumptions
The Group disaggregates insurance finance income or expenses on motor
insurance contracts issued between Profit or Loss and OCI. The Group has made
an accounting policy choice to disaggregate insurance finance income or
expenses for the period to include within OCI an amount which reflects the
difference between the carrying amount of a group of contracts and the amount
that the group would have been measured at using the discount rates in effect
on initial recognition, effectively reflecting the impact of discount rate
changes on the opening liability for incurred claims through Other
Comprehensive Income. The amount recognised in Other Comprehensive Income over
the duration of a group of contracts will always total zero.
The impact of changes in market interest rates on the value of the insurance
assets and liabilities are reflected in OCI in order to minimise accounting
mismatches between the accounting for financial assets and insurance assets
and liabilities. The Group's financial assets backing the motor insurance
portfolios are predominantly measured at fair value through Other
Comprehensive Income ("FVOCI").
RISK MANAGEMENT
Refer to Notes 3.6 and 3.7 for detail on risks relating to insurance
liabilities and reinsurance assets, and the management thereof.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these Consolidated Financial Statements requires the Group
to select accounting policies and make estimates, assumptions and judgements.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below. The Group based its assumptions
and estimates on information and facts available when the financial statements
were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Group. Such changes are reflected
in the assumptions when they occur. The Group disaggregates information to
disclose major product lines, namely Motor Vehicle, Motorcycle and Taxi.
Accounting judgements
A. Level of aggregation and measurement model for insurance contracts
For measurement purposes, insurance contracts are aggregated into groups based
on an assessment of risks and dividing each portfolio into annual cohorts by
year of issue. Judgement is required in assessing if the contracts have
similar risks that are managed together. Each annual cohort is then divided
into three groups based on the expected profitability of contracts, being
contracts that are onerous on initial recognition, have no significant
possibility of becoming onerous, or any other contracts which do not fall into
those categories. Judgement is applied to determine the profitability of
contracts at initial recognition. The Group applies the default assumption
that no groups of contracts are onerous unless facts and circumstances
indicate otherwise. Further judgement is applied to determine how contracts
will be measured. The Group applies the PAA to simplify the measurement of all
insurance contracts issued and reinsurance contracts held. The judgement
around the PAA has been disclosed in section B(iii) of the Group's accounting
policies for insurance liabilities and reinsurance assets.
B. Insurance acquisition cash flows
IFRS 17 requires an entity to include a portion of its overhead costs that are
directly attributable in fulfilling the obligations under an insurance
contract, in the fulfilment cash flows of the related liability.
The Group applies judgement in determining the inputs used in the methodology
to systematically and rationally allocate insurance acquisition cash flows to
groups of insurance contracts. This includes judgements about the amounts
allocated to insurance contracts expected to arise from renewals of existing
insurance contracts in a group and the volume of expected renewals from new
contracts issued in the period.
At the end of each reporting period, the Group revisits the assumptions made
to allocate insurance acquisition cash flows to groups, and where necessary,
revises the amounts of assets for insurance acquisition cash flows
accordingly.
C. Discount rates
As there are no referenced asset portfolios backing the LIC, because of the
volatility and uncertainty of claims on short-term insurance contracts, the
Group deemed it more appropriate to use the bottom-up approach under IFRS 17
for discounting. This reflects a risk-free yield curve and an illiquidity
premium. The standard does not specify how to calculate the illiquidity
premium.
The Group uses the risk-free curves published by the Bank of England. The
Solvency II GBP risk-free yield curve is based on six-month SONIA swap rates,
corrected using an adjustment defined by the PRA for credit risk. SONIA-based
yield curves are considered to contain negligible credit risk, according to
the Bank of England, as the contracts that make it up settle overnight.
The Group has performed a number of analyses in determining the choice of the
illiquidity risk component, including using the Solvency II volatility
adjustment ("VA"). The analyses did not identify any material differences in
reserves. Given the nature of the liabilities and that there is no penalty or
surrender value to exit the insurance contracts, the Group applied judgement
in setting the illiquidity risk component and has selected the VA to be an
appropriate proxy for the illiquidity adjustment.
Discount rates applied for discounting of future cash flows are listed below:
31 December 2025 31 December 2024
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Motor insurance 3.78% 3.77% 3.91% 4.29% 4.70% 4.39% 4.28% 4.31%
See Note 3.6 for the impact of a 1% increase or decrease in the discount rates
used.
D. Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation that the Group
requires for bearing the uncertainty about the amount and timing of the cash
flows of groups of insurance contracts. The risk adjustment reflects an amount
that an insurer would rationally pay to remove the uncertainty that future
cash flows could exceed the expected value amount.
The Group has estimated the risk adjustment using a methodology which targets
a confidence level (probability of sufficiency) approach between the 80th and
90th percentile. At 31 December 2025, the net risk adjustment applied equates
to an approximate confidence interval of 81.4% (31 December 2024: 80.6%). That
is, the Group has assessed its indifference to uncertainty for all product
lines (as an indication of the compensation that it requires for bearing
non-financial risk) as being equivalent to the 80th to 90th percentile
confidence level less the mean of an estimated probability distribution of the
future cash flows. The Group has estimated the probability distribution of the
future cash flows, and the additional amount above the expected present value
of future cash flows required to meet the target percentiles.
Sabre uses a 'bootstrapping' method to create a distribution of outcomes for
the outstanding claim amounts. This distribution is assessed to calculate the
risk adjustment at a chosen confidence level. Bootstrapping involves taking
random samples of the data for analysis, rather than using the full dataset.
Multiple random samples are selected, with each random sample selected from
the full dataset.
See Note 3.6 for the impact of moving the confidence interval of the booked
risk adjustment up or down by 5ppts.
Critical accounting estimates
E. Liability for incurred claims ("LIC")
The ultimate cost of outstanding claims is estimated by using a range of
standard actuarial claims projection techniques, such as Chain Ladder and
Bornheutter-Ferguson methods.
The main assumption underlying these techniques is that a Group's past claims
development experience can be used to project future claims development and
hence ultimate claims costs. These methods extrapolate the development of paid
and incurred losses, average costs per claim (including claims handling
costs), and claim numbers based on the observed development of earlier years
and expected loss ratios. Historical claims development is mainly analysed by
accident years, but can also be further analysed by geographical area, as well
as by significant business lines and claim types. Large claims are usually
separately addressed, either by being reserved at the face value of loss
adjuster estimates or separately projected in order to reflect their future
development. In most cases, no explicit assumptions are made regarding future
rates of claims inflation or loss ratios. Instead, the assumptions used are
those implicit in the historical claims development data on which the
projections are based. Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future (e.g. to reflect one-off
occurrences, changes in external or market factors such as public attitudes to
claiming, economic conditions, levels of claims inflation, judicial decisions
and legislation, as well as internal factors such as portfolio mix, policy
features and claims handling procedures) in order to arrive at the estimated
ultimate cost of claims that present the probability weighted expected value
outcome from the range of possible outcomes, taking account of all the
uncertainties involved.
The Group has the right to pursue third parties for payment of some or all
costs. Estimates of salvage recoveries and subrogation reimbursements are
considered as an allowance in the measurement of ultimate claims costs. Other
key circumstances affecting the reliability of assumptions include variation
in interest rates and delays in settlement.
The key estimates in calculating the LIC are the amount and timing of future
claims payments in relation to claims already incurred. This is primarily
assessed with reference to past performance, including past settlement
patterns, as per the actuarial methodology outlined above. This includes
estimating the likely changes in inflation as relates to claims already
incurred, as well as the expected frequency of claims which have occurred but
which have not yet been reported. The ongoing cost of handling claims already
incurred is estimated with reference to the historical cost-per-claim
calculated over the past 12 months.
See Note 3.6 for the impact of a 5ppts increase in loss ratio and the impact
of a 5% increase in outstanding claims.
3.1. Composition of the Statement of Financial Position
An analysis of the amounts presented in the Statement of Financial Position
for insurance contracts is included in the table below.
As at December
2025 2024
Notes £'k £'k
Insurance contract liabilities
Insurance contract liabilities
Motor Vehicle insurance 362,019 334,767
Motorcycle insurance 41,200 34,321
Taxi insurance 65,252 37,308
Asset for insurance acquisition cash flows
Motor Vehicle insurance 3.3 (6,184) (6,488)
Motorcycle insurance 3.3 (906) (880)
Taxi insurance 3.3 (699) (1,104)
Total insurance contract liabilities 460,682 397,924
Reinsurance contracts assets
Motor Vehicle insurance 157,554 133,974
Motorcycle insurance 20,469 15,018
Taxi insurance 38,359 11,766
Total reinsurance contract assets 216,382 160,758
3.2. Movements in insurance and reinsurance contract balances
3.2.1. Insurance contracts issued
Reconciliation of liability for remaining coverage and the liability for
incurred claims
In £'k 2025 2024
Liabilities for Remaining Coverage Liabilities for Incurred Claims Total Liabilities for Remaining Coverage Liabilities for Incurred Claims Total
("LRC")
("LIC")
("LRC")
("LIC")
Estimates of present value of future cash flows Risk adjustment for non-financial risk Estimates of present value of future cash flows Risk adjustment for non-financial risk
Opening insurance contract liabilities 69,527 270,440 57,957 397,924 63,008 258,358 53,473 374,839
Insurance revenue (217,990) - - (217,990) (248,131) - - (248,131)
Insurance service expenses 16,753 145,094 12,644 174,491 18,166 132,011 4,484 154,661
Incurred claims and other directly attributable expenses - 143,363 19,157 162,520 - 127,787 14,988 142,775
Changes that relate to past service - changes in the FCF relating to the LIC - 1,731 (6,513) (4,782) - 4,224 (10,504) (6,280)
Amortisation of insurance acquisition cash flows 16,753 - - 16,753 18,166 - - 18,166
Insurance service result (201,237) 145,094 12,644 (43,499) (229,965) 132,011 4,484 (93,470)
Insurance finance expense recognised in Profit or Loss Account - 9,968 - 9,968 - 8,392 - 8,392
Insurance finance expense/(income) recognised in Other Comprehensive Income - 5,808 - 5,808 - (6,852) - (6,852)
Total changes in Comprehensive Income (201,237) 160,870 12,644 (27,723) (229,965) 133,551 4,484 (91,930)
Cash flows
Premiums received 205,082 - - 205,082 254,389 - - 254,389
Claims and other insurance services expenses paid - (98,531) - (98,531) - (121,469) - (121,469)
Insurance acquisition cash flows (16,070) - - (16,070) (17,905) - - (17,905)
Total cash flows 189,012 (98,531) - 90,481 236,484 (121,469) - 115,015
Closing insurance contract liabilities 57,302 332,779 70,601 460,682 69,527 270,440 57,957 397,924
3.2.2. Reinsurance contracts held
Reconciliation of assets for remaining coverage and the assets for incurred
claims
In £'k 2025 2024
Assets for remaining coverage Assets for incurred claims TOTAL Assets for remaining coverage Assets for incurred claims TOTAL
Estimates of present value of future cash flows Risk adjustment for non-financial risk Estimates of present value of future cash flows Risk adjustment for non-financial risk
Opening reinsurance contract assets 3,450 113,655 43,653 160,758 2,075 123,433 41,218 166,726
Net income/(expense) from reinsurance contracts held (23,872) 43,377 11,175 30,680 (33,617) 10,591 2,435 (20,591)
Reinsurance expense (23,872) - - (23,872) (33,617) - - (33,617)
Incurred claims recovery - 33,626 13,785 47,411 - 10,233 9,205 19,438
Changes that relate to past service - 9,751 (2,610) 7,141 - 358 (6,770) (6,412)
Reinsurance finance income recognised in Profit or Loss Account - 4,236 - 4,236 - 3,714 - 3,714
Reinsurance finance income/(expense) recognised in Other Comprehensive Income - 2,856 - 2,856 - (5,880) - (5,880)
Total changes in Comprehensive Income (23,872) 50,469 11,175 37,772 (33,617) 8,425 2,435 (22,757)
Cash flows
Premiums paid 23,924 - - 23,924 34,992 - - 34,992
Recoveries received - (6,072) - (6,072) - (18,203) - (18,203)
Total cash flows 23,924 (6,072) - 17,852 34,992 (18,203) - 16,789
Closing reinsurance contract assets 3,502 158,052 54,828 216,382 3,450 113,655 43,653 160,758
3.3. Assets for insurance acquisition cash flows
£'k
Balance as at 1 January 2024 8,733
Amounts incurred during the year 17,905
Amounts derecognised and included in measurement of insurance contracts (18,166)
Balance as at 31 December 2024 8,472
Amounts incurred during the period 16,070
Amounts derecognised and included in measurement of insurance contracts (16,753)
Balance as at 31 December 2025 7,789
The following table sets out when the Group expects to derecognise assets for
insurance acquisition cash flows after the reporting date:
£'k
31 December 2025
Less than one year 7,733
More than one year 56
7,789
31 December 2024
Less than one year 8,410
More than one year 62
8,472
3.4. Claims development
The presentation of the claims development tables for the Group is based on
the actual date of the event that caused the claim (accident year basis).
These triangles present estimated costs including any risk adjustment and
associated liability related to the future cost of handling claims.
Gross of reinsurance
Accident year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
£'k £'k £'k £'k £'k £'k £'k £'k £'k £'k £'k
Estimates of undiscounted gross cumulative claims
At the end of the accident year 111,518 165,707 120,077 126,981 101,965 89,233 136,811 133,334 146,677 170,463
- One year later 100,935 131,803 108,089 122,663 97,953 93,309 131,433 134,785 135,759
- Two years later 94,294 123,651 107,988 127,225 93,390 90,941 121,909 149,927
- Three years later 91,336 122,674 113,257 131,254 88,192 95,294 126,639
- Four years later 90,789 124,128 118,600 135,173 89,574 96,208
- Five years later 92,629 137,472 125,038 138,777 88,094
- Six years later 101,655 137,660 132,657 138,216
- Seven years later 101,124 135,674 127,866
- Eight years later 102,797 132,393
- Nine years later 102,979
Current estimate of cumulative claims 102,979 132,393 127,866 138,216 88,094 96,208 126,639 149,927 135,759 170,463
Cumulative gross claims paid (94,134) (90,579) (115,385) (112,599) (74,888) (72,990) (86,255) (74,182) (65,303) (43,432)
Undiscounted gross liabilities - accident years from 2016 to 2025 8,845 41,814 12,481 25,617 13,206 23,218 40,384 75,745 70,456 127,031 438,797
Undiscounted gross liabilities - accident years from 2015 and before 35,049
Effect of discounting (70,466)
Total gross liabilities for incurred claims ("LIC") 403,380
Liabilities for remaining coverage ("LRC") 57,302
Total gross liabilities included in the Statement of Financial Position 460,682
The numbers are undiscounted, but otherwise presented on an IFRS 17 basis. The
'boxed' numbers have not been restated under IFRS 17 and reflect the numbers
as previously reported under IFRS 4. The primary difference between the IFRS
17 and IFRS 4 numbers presented here relates to the risk adjustment.
The gross liabilities for incurred claims and gross liabilities for remaining
coverage per product is given below:
LIC LRC Total
Motor Vehicle 306,910 48,925 355,835
Motorcycle 37,004 3,290 40,294
Taxi 59,466 5,087 64,553
Total 403,380 57,302 460,682
Net of reinsurance
Accident year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
£'k £'k £'k £'k £'k £'k £'k £'k £'k £'k £'k
Estimates of undiscounted gross cumulative claims
At the end of the accident year 104,808 106,478 111,433 115,011 85,723 81,161 106,049 102,185 122,858 114,395
- One year later 93,664 96,446 99,649 111,550 81,882 82,487 102,066 99,913 109,912
- Two years later 87,824 91,806 98,641 111,347 80,990 80,146 100,202 105,495
- Three years later 85,243 91,179 99,071 111,342 78,353 80,579 101,099
- Four years later 84,995 88,545 100,893 112,156 78,193 81,590
- Five years later 84,891 92,002 103,254 114,153 77,903
- Six years later 86,784 92,375 103,873 114,361
- Seven years later 86,536 93,897 103,134
- Eight years later 85,464 89,983
- Nine years later 85,237
Current estimate of cumulative claims 85,237 89,983 103,134 114,361 77,903 81,590 101,099 105,495 109,912 114,395
Cumulative gross claims paid (84,330) (85,835) (99,105) (106,529) (72,525) (70,934) (80,808) (71,351) (65,303) (43,432)
Undiscounted gross liabilities - accident years from 2016 to 2025 907 4,148 4,029 7,832 5,378 10,656 20,291 34,144 44,609 70,963 202,957
Undiscounted gross liabilities - accident years from 2015 and before 7,612
Effect of discounting (20,069)
Total gross liabilities for incurred claims ("LIC") 190,500
Liabilities for remaining coverage ("LRC") 53,800
Total gross liabilities included in the Statement of Financial Position 244,300
The numbers are undiscounted, but otherwise presented on an IFRS 17 basis. The
'boxed' numbers have not been restated under IFRS 17 and reflect the numbers
as previously reported under IFRS 4. The primary difference between the IFRS
17 and IFRS 4 numbers presented here relates to the risk adjustment.
The net liabilities for incurred claims and net liabilities for remaining
coverage per product is given below:
LIC LRC Total
Motor Vehicle 152,449 45,837 198,286
Motorcycle 16,707 3,116 19,823
Taxi 21,344 4,847 26,191
Total 190,500 53,800 244,300
3.5. Insurance revenue and expenses - Segmental disclosure
An analysis of insurance revenue, insurance service expenses and net expenses
from reinsurance contracts held is included in the tables below. Additional
information on amounts recognised in Profit or Loss and OCI is included in the
movements in insurance and reinsurance contract balances in Note 3.2.
The Group provides short-term motor insurance to clients, which comprises
three lines of business, Motor Vehicle insurance, Motorcycle insurance and
Taxi insurance, which are written solely in the UK. The Group has no other
lines of business, nor does it operate outside of the UK. Other income relates
to auxiliary products and services, including brokerage and administration
fees, all relating to the motor insurance business. The Group does not have a
single client which accounts for more than 10% of revenue.
2025 2024
Motor Vehicles Motorcycle Taxi Total Motor Vehicles Motorcycle Taxi Total
£'k £'k £'k £'k £'k £'k £'k £'k
Insurance revenue
Insurance revenue from contracts measured under the PAA 193,312 9,454 15,224 217,990 222,635 10,199 15,297 248,131
Total insurance revenue 193,312 9,454 15,224 217,990 222,635 10,199 15,297 248,131
Insurance service expense
Incurred claims and other directly attributable expenses (112,244) (12,319) (37,957) (162,520) (117,752) (6,873) (18,150) (142,775)
Changes that relate to past service - changes in the FCF relating to the LIC 3,800 (93) 1,075 4,782 1,769 188 4,323 6,280
Amortisation of insurance acquisition cash flows (12,679) (2,189) (1,885) (16,753) (14,234) (1,993) (1,939) (18,166)
Total insurance service expense (121,123) (14,601) (38,767) (174,491) (130,217) (8,678) (15,766) (154,661)
Net income/(expense) from reinsurance contracts held
Reinsurance expenses - contracts measured under the PAA (21,133) (1,039) (1,700) (23,872) (30,119) (1,405) (2,093) (33,617)
Incurred claims recovery 15,988 4,185 27,238 47,411 13,223 944 5,271 19,438
Changes that relate to past service - changes in the FCF relating to incurred 6,767 1,829 (1,455) 7,141 (3,803) 262 (2,871) (6,412)
claims recovery
Total net income/(expense) from reinsurance contracts held 1,622 4,975 24,083 30,680 (20,699) (199) 307 (20,591)
Total insurance service result 73,811 (172) 540 74,179 71,719 1,322 (162) 72,879
Other than reinsurance assets and insurance liabilities (see Note 3.1), the
Group does not allocate, monitor or report assets and liabilities per business
line and does not consider the information useful in the day-to-day running of
the Group's operations. The Group also does not allocate, monitor or report
other income and expenses per business line.
3.6. Underwriting risk
The principal risk the Group faces under insurance contracts is that the
actual claims and benefit payments, or the timing thereof, differ from
expectations. This is influenced by the frequency of claims, severity of
claims, actual benefits paid and subsequent development of long-term claims.
Therefore, the objective of the Group is to ensure that sufficient reserves
are available to cover these liabilities.
The Group issues only motor insurance contracts within the UK, which usually
cover a 12-month duration. For these contracts, the most significant risks
arise from severe weather conditions or single catastrophic events. For
longer-tail claims that take some years to settle, there is also inflation
risk.
The above risk exposure is mitigated by diversification across a large
portfolio of policyholders and geographical areas within the UK. The
variability of risks is improved by careful selection and implementation of
underwriting strategies, which are designed to ensure that risks are
diversified in terms of type of risk and level of insured benefits. This is
largely achieved through diversification across policyholders. Furthermore,
strict claim review policies to assess all new and ongoing claims, regular
detailed review of claims handling procedures and frequent investigation of
possible fraudulent claims are all policies and procedures put in place to
reduce the risk exposure of the Group. The Group further enforces a policy of
actively managing and promptly pursuing claims, in order to reduce its
exposure to unpredictable future developments that can negatively impact the
business. Inflation risk is mitigated by taking expected inflation into
account when estimating insurance contract liabilities.
The Group purchases reinsurance as part of its risk mitigation programme.
Reinsurance ceded is placed on a non-proportional basis. This non-proportional
reinsurance is excess-of-loss, designed to mitigate the Group's net exposure
to single large claims or catastrophe losses. The current reinsurance
programme has a retention limit of £1m, with no upper limit. Under this
programme, the Group pays the first £1m of any claim and, from 1 July 2025,
50% of the next £1m (prior to 1 July 2025: 40%). Any amount above £2m, is
covered in full by the panel of reinsurers. All retention levels are subject
to monthly indexation subsequent to the accident date. Amounts recoverable
from reinsurers are estimated in a manner consistent with the outstanding
claims provision and are in accordance with the reinsurance contracts.
Although the Group has reinsurance arrangements, it is not relieved of its
direct obligations to its policyholders and thus a credit exposure exists with
respect to ceded reinsurance, to the extent that any reinsurer is unable to
meet its obligations assumed under such reinsurance agreements. The Group's
placement of reinsurance is diversified such that it is not dependent on a
single reinsurer. There is no single counterparty exposure that exceeds 25% of
total reinsurance assets at the reporting date.
Key assumptions
The principal assumption underlying the liability estimates is that the
Group's future claims development will follow a similar pattern to past claims
development experience. This includes assumptions in respect of average claim
costs, claim handling costs, claim inflation factors and claim numbers for
each accident year. Additional qualitative judgements are used to assess the
extent to which past trends may not apply in the future, for example: one-off
occurrence; changes in market factors such as public attitude to claiming:
economic conditions; and internal factors such as portfolio mix, policy
conditions and claims handling procedures. Judgement is further used to assess
the extent to which external factors such as judicial decisions and government
legislation affect the estimates.
Other key circumstances affecting the reliability of assumptions include
variation in interest rates and delays in settlement.
Sensitivities
The motor claim liabilities are primarily sensitive to the reserving
assumptions noted above. It has not been possible to quantify the sensitivity
of individual, specific assumptions such as legislative changes.
The following analysis is performed for reasonably possible movements in key
assumptions with all other assumptions held constant, showing the impact on
profit after tax and equity. The correlation of assumptions will have a
significant effect in determining the ultimate claims liabilities, but to
demonstrate the impact due to changes in assumptions, assumptions had to be
changed on an individual basis. It should be noted that movements in these
assumptions are non-linear. This sensitivity analysis reflects one-off impacts
at the balance sheet date and should not be interpreted as a forecast.
Gross of reinsurance Net of reinsurance
2025 2025
Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity
£'k £'k £'k £'k £'k £'k
Liability for incurred claims ((1) (2) (3))
Impact of 5% increase in insurance contract liabilities (16,959) - (16,959) (9,500) - (9,500)
Impact of an increase in ultimate loss ratio of 5ppts (25,326) - (25,326) (14,800) - (14,800)
Discount rates
Impact of 1% increase in the discount rates used in calculating present value 1,008 5,564 6,572 178 2,070 2,248
of future expected cash outflows
Impact of 1% decrease in the discount rates used in calculating present value (1,114) (5,907) (7,021) (189) (2,189) (2,378)
of future expected cash outflows
Risk adjustment for non-financial risk
Impact of moving the confidence interval of the booked risk adjustment up by (11,555) - (11,555) (2,626) - (2,626)
5ppts
Impact of moving the confidence interval of the booked risk adjustment down by 8,988 - 8,988 2,233 - 2,233
5ppts
(1) The impact of decreases will have a similar but
opposite impact
(2) Excludes the impact of discounting
(3) A substantial increase in individually large claims
which are over our reinsurance retention limit, generally will have no impact
on profit after tax
Gross of reinsurance Net of reinsurance
2024 2024
Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity Increase/(decrease) in profit, after tax Increase/(decrease) in other comprehensive income, after tax Increase/decrease in equity
£'k £'k £'k £'k £'k £'k
Liability for incurred claims (1) (2) (3)
Impact of 5% increase in insurance contract liabilities (13,921) - (13,921) (7,902) - (7,902)
Impact of an increase in ultimate loss ratio of 5ppts (22,033) - (22,033) (13,256) - (13,256)
Discount rates
Impact of 1% increase in the discount rates used in calculating present value 783 5,499 6,282 151 2,116 2,267
of future expected cash outflows
Impact of 1% decrease in the discount rates used in calculating present value (882) (6,497) (7,379) (159) (2,445) (2,604)
of future expected cash outflows
Risk adjustment for non-financial risk
Impact of moving the confidence interval of the booked risk adjustment up by (9,018) - (9,018) (2,358) - (2,358)
5ppts
Impact of moving the confidence interval of the booked risk adjustment down by 7,339 - 7,339 2,004 - 2,004
5ppts
(1) The impact of decreases will have a similar but
opposite impact
(2) Excludes the impact of discounting
(3) A substantial increase in individually large claims
which are over our reinsurance retention limit, generally will have no impact
on profit after tax
The 2024 risk adjustment sensitivity impact has been recalculated to reflect
the impact of discounting in line with the impact calculated for 2025.
Climate change
Management has assessed the short-, medium- and long-term risks that result
from climate change. The short-term risk is low. Given the geographical
diversity of the Group's policyholders within the UK and the Group's
reinsurance programme, it is highly unlikely that a climate event will
materially impact the Group's financial position, including its assessment of
the liability for incurred claims. More likely is that the costs associated
with the transition to a low-carbon economy will impact the Group's indemnity
spend in the medium term, as electronic vehicles are currently relatively
expensive to fix. This is somewhat, or perhaps completely, offset by advances
in technology reducing the frequency of claims, in particular bodily injury
claims which are generally far more expensive than damage to vehicles. These
changes in the costs of claims are gradual and, as such, reflected in the
Group's claims experience and fed into the pricing of policies. However, if
the propensity to travel by car decreases overall, this could impact the
Group's income in the long term.
3.7. Insurance-related credit risk
Key insurance-related areas where the Group is exposed to credit default risk
are:
‒ Reinsurers default on their share of the Group's insurance
liabilities
‒ Default on amounts due from insurance contract
intermediaries or policyholders
Sabre uses a large panel of secure reinsurance companies. The credit risk of
reinsurers included in the reinsurance programme is considered annually by
reviewing their credit worthiness. Sabre's largest reinsurance counterparty is
Munich Re. The credit risk exposure is further monitored throughout the year
to ensure that changes in credit risk positions are adequately addressed.
The following tables demonstrate the Group's exposure to credit risk in
respect of overdue insurance debt and counterparty creditworthiness.
Overdue insurance-related debt
Neither past due nor impaired Past due 1-90 days Past due more than 90 days Assets that have been impaired Carrying value in the balance sheet
At 31 December 2025 £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) 266,781 - - - 266,781
Insurance receivables (2) 42,708 81 68 - 42,857
Total 309,489 81 68 - 309,638
Neither past due nor impaired Past due 1-90 days Past due more than 90 days Assets that have been impaired Carrying value in the balance sheet
At 31 December 2024 £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) 202,231 - - - 202,231
Insurance receivables (2) 41,755 22 - - 41,777
Total 243,986 22 - - 244,008
(1) Undiscounted
(2) Included within 'Insurance contract liabilities'
Exposure by credit rating
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) - 130,186 136,595 - - - 266,781
Insurance receivables (2) - - - - - 42,857 42,857
Total - 130,186 136,595 - - 42,857 309,638
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
Reinsurance contracts assets (1) - 102,138 100,093 - - - 202,231
Insurance receivables (2) - - - - - 41,777 41,777
Total - 102,138 100,093 - - 41,777 244,008
(1) Undiscounted
(2) Included within 'Insurance contract liabilities'
3.8. Net financial result
2025 2024
Insurance Non-insurance related Total Insurance Non-insurance related Total
related
related
Notes £'k £'k £'k £'k £'k £'k
Investment income
Interest income on financial assets using effective interest rate method 4.5 10,816 903 11,719 7,501 425 7,926
Realised gains on derecognition of debt securities measured at FVOCI 4.6 7 - 7 - - -
Amounts recognised in OCI 4.6 5,518 - 5,518 3,774 - 3,774
Total investment income 16,341 903 17,244 11,275 425 11,700
Insurance finance expense from insurance contracts held
Interest accreted (9,968) - (9,968) (8,392) - (8,392)
Effect of changes in interest rates and other financial assumptions (5,808) - (5,808) 6,852 - 6,852
(15,776) - (15,776) (1,540) - (1,540)
Reinsurance finance income/(expense) from reinsurance contracts held
Interest accreted 4,236 - 4,236 3,714 - 3,714
Effect of changes in interest rates and other financial assumptions 2,856 - 2,856 (5,880) - (5,880)
7,092 - 7,092 (2,166) - (2,166)
Net insurance finance expense (8,684) - (8,684) (3,706) - (3,706)
Net financial results 7,657 903 8,560 7,569 425 7,994
Represented by:
Amounts recognised in Profit or Loss 5,091 903 5,994 2,823 425 3,248
Amounts recognised in OCI 2,566 - 2,566 4,746 - 4,746
Total 7,657 903 8,560 7,569 425 7,994
4. FINANCIAL ASSETS
RISK MANAGEMENT
Refer to the following notes for detail on risks relating to financial assets:
Investment concentration risk - Note 4.2.1
Interest rate risk - Note 4.2.2
Credit risk - Note 4.4
Liquidity risk - Note 6
The Group's financial assets are summarised below:
2025 2024
Notes £'k £'k
Cash and cash equivalents 4.1 25,475 31,314
Debt securities held at fair value through Other Comprehensive Income 4.2 325,752 311,184
Receivables 4.3 41 32
Total 351,268 342,530
4.1. Cash and cash equivalents
ACCOUNTING POLICY - CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held on call with
banks and money market funds. Cash and cash equivalents are carried at
amortised cost.
2025 2024
£'k £'k
Cash at bank and on hand 14,823 18,174
Money market funds 10,652 13,140
Total 25,475 31,314
Cash held in money market funds has no notice period for withdrawal.
The carrying value of cash and cash equivalents approximates fair value. The
full value is expected to be realised within 12 months.
4.2. Debt securities held at fair value through Other Comprehensive Income
ACCOUNTING POLICY - FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Classification
The Group classifies the following financial assets at fair value through
Other Comprehensive Income ("FVOCI"):
‒ Debt securities
A debt instrument is measured at FVOCI only if it meets both of the following
conditions and is not designated at fair value through the Profit or Loss
Account ("FVTPL"):
‒ The asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling
financial assets
‒ The contractual terms of the financial asset give rise to
cash flows that are solely payments of principal and interest ("SPPI") on the
principal amount outstanding on specified dates
Recognition and measurement
At initial recognition, the Group measures debt securities through Other
Comprehensive Income at fair value, plus the transaction costs that are
directly attributable to the acquisition of the financial asset. Debt
securities at FVOCI are subsequently measured at fair value.
Impairment
At each reporting date, the Group assesses debt securities at FVOCI for
impairment. Under IFRS 9, a 'three-stage' model for calculating the expected
credit losses ("ECL") is used, and is based on changes in credit quality since
initial recognition. Refer to Note 4.4.
The Group's debt securities held at fair value through Other Comprehensive
Income are summarised below:
2025 2024
£'k % holdings £'k % holdings
Government bonds 124,798 38.3% 112,793 36.2%
Government-backed securities 100,717 30.9% 103,267 33.2%
Corporate bonds 100,237 30.8% 95,124 30.6%
Total 325,752 100.0% 311,184 100.0%
4.2.1. Investment concentration risk
Excessive exposure to particular industry sectors or groups can give rise to
concentration risk. The Group has no significant investment concentration in
any particular industrial sector and therefore is unlikely to suffer
significant losses through its investment portfolio as a result of
over-exposure to sectors engaged in similar activities or which have similar
economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic, political or
other conditions.
A significant part of the Group's investment portfolio consists primarily of
UK government bonds and government-backed bonds; therefore, the risk of
government default does exist, however, the likelihood is extremely remote.
The remainder of the portfolio consists of investment grade corporate bonds.
The Group continues to monitor the strength and security of all bonds. The
Group does not have direct exposure to Ukrainian and Russian assets.
The Group's exposure by geographical area is outlined below:
Government bonds Government-backed securities Corporate bonds Total
At 31 December 2025 £'k £'k £'k £'k % holdings
United Kingdom 124,798 3,102 25,611 153,511 47.1%
Europe - 61,744 44,371 106,115 32.6%
Northern America - 25,265 23,112 48,377 14.9%
Oceania - - 5,018 5,018 1.5%
Asia - 10,606 2,125 12,731 3.9%
Total 124,798 100,717 100,237 325,752 100.0%
Government bonds Government-backed securities Corporate bonds Total
At 31 December 2024 £'k £'k £'k £'k % holdings
United Kingdom 112,793 3,038 31,187 147,018 47.2%
Europe - 59,277 37,002 96,279 30.9%
Northern America - 25,761 19,863 45,624 14.7%
Oceania - - 4,973 4,973 1.6%
Asia - 15,191 2,099 17,290 5.6%
Total 112,793 103,267 95,124 311,184 100.0%
The Group's exposure by investment type for government-backed securities and
corporate bonds is outlined below:
Agency Supranational Total
At 31 December 2025 £'k £'k £'k
Government-backed securities 38,044 62,673 100,717
% of holdings 37.8% 62.2% 100.0%
Financial Industrial Utilities Total
At 31 December 2025 £'k £'k £'k £'k
Corporate bonds 55,765 34,235 10,237 100,237
% of holdings 55.6% 34.2% 10.2% 100.0%
Agency Supranational Total
At 31 December 2024 £'k £'k £'k
Government-backed securities 43,921 59,346 103,267
% of holdings 42.5% 57.5% 100.0%
Financial Industrial Utilities Total
At 31 December 2024 £'k £'k £'k £'k
Corporate bonds 51,698 38,873 4,553 95,124
% of holdings 54.3% 40.9% 4.8% 100.0%
4.2.2. Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. Floating rate instruments expose the Group to cash flow interest risk,
whereas fixed interest rate instruments expose the Group to fair value
interest risk.
The Group's interest risk policy requires it to manage the maturities of
interest-bearing financial assets and interest-bearing financial liabilities.
Interest on fixed interest rate instruments is priced at inception of the
financial instrument and is fixed until maturity.
The Group has a concentration of interest rate risk in UK government bonds and
other fixed-income securities.
The analysis that follows is performed for reasonably possible movements in
key variables with all other variables held constant, showing the impact on
profit before tax and equity. The correlation of variables will have a
significant effect in determining the ultimate impact on interest rate risk,
but to demonstrate the impact due to changes in variables, variables had to be
changed on an individual basis. It should be noted that movements in these
variables are non-linear.
The impact of any movement in market values, such as those caused by changes
in interest rates, is taken through Other Comprehensive Income and has no
impact on profit after tax.
Decrease in profit after tax Decrease in total equity
2025 2024 2025 2024
At 31 December £'k £'k £'k £'k
Interest rate
Impact of a 100-basis point increase in interest rates on debt securities at - - (3,378) (3,250)
FVOCI
Impact of a 200-basis point increase in interest rates on debt securities at - - (6,755) (6,499)
FVOCI
4.2.3. Fair value
ACCOUNTING POLICY
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, or in its absence, the most advantageous market to which
the Group has access at that date.
The Group measures the fair value of an instrument using the quoted bid price
in an active market for that instrument. A market is regarded as active if
transactions for the asset take place with sufficient frequency and volume to
provide pricing information on an ongoing basis.
The fair value of financial instruments traded in active markets is based on
quoted market prices at the Statement of Financial Position date.
A market is regarded as active if quoted prices are readily and regularly
available from the stock exchange or pricing service, and those prices
represent actual and regularly occurring market transactions on an arm's
length basis. The quoted market price used for financial assets held by the
Group is the closing bid price.
Fair value measurements are based on observable and unobservable inputs.
Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect the Group's view of market assumptions in the
absence of observable market information.
IFRS 13 requires certain disclosures which require the classification of
financial assets and financial liabilities measured at fair value using a fair
value hierarchy that reflects the significance of the inputs used in making
the fair value measurement.
Disclosure of fair value measurements by level is according to the following
fair value measurement hierarchy:
‒ Level 1: fair value is based on quoted market prices
(unadjusted) in active markets for identical instruments as measured on
reporting date
‒ Level 2: fair value is determined through inputs, other
than quoted prices included in Level 1 that are observable for the assets and
liabilities, either directly (prices) or indirectly (derived from prices)
‒ Level 3: fair value is determined through valuation
techniques which use significant unobservable inputs
Level 1
The fair value of financial instruments traded in active markets is based on
quoted market prices at the Statement of Financial Position date.
A market is regarded as active if quoted prices are readily and regularly
available from the stock exchange or pricing service, and those prices
represent actual and regularly occurring market transactions on an arm's
length basis. The quoted market price used for financial assets held by the
Group is the closing bid price. These instruments are included in Level 1 and
comprise only debt securities classified as fair value through Other
Comprehensive Income.
Level 2
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rely as
little as possible on entity-specific estimates. If all significant input
required to fair value an instrument is observable, the instrument is included
in Level 2. The Group has no Level 2 financial instruments.
Level 3
If one or more of the significant inputs are not based on observable market
data, the instrument is included in Level 3. The Group has no Level 3
financial instruments.
The following table summarises the classification of financial instruments:
Level 1 Level 2 Level 3 Total
At 31 December 2025 £'k £'k £'k £'k
Assets held at fair value
Debt securities held at FVOCI 325,752 - - 325,752
Total 325,752 - - 325,752
Level 1 Level 2 Level 3 Total
At 31 December 2024 £'k £'k £'k £'k
Assets held at fair value
Total 311,184 - - 311,184
Debt securities held at FVOCI 311,184 - - 311,184
Transfers between levels
There have been no transfers between levels during the year (2024: no
transfers).
4.3. Receivables
ACCOUNTING POLICY
Classification
The Group classifies its receivables as at amortised cost only if both of the
following criteria are met:
‒ The asset is held within a business model whose objective
is to collect the contractual cash flows
‒ The contractual terms give rise to cash flows that are
solely payments of principal and interest
Recognition and measurement
Receivables are initially recognised at fair value and subsequently measured
at amortised cost using the effective interest method, less provision for
expected credit losses.
Impairment
The Group measures loss allowances at an amount equal to lifetime ECL. To
measure the expected credit losses, receivables have been grouped based on
shared credit risk characteristics and the days past due to create the
categories, namely, performing, underperforming and not performing. The
expected loss rates are based on the payment profiles of receivables over a
period of 36 months before year end. The loss rates are adjusted to reflect
current and forward-looking information on macro-economic factors, such as the
socio-economic environment affecting the ability of the debtors to settle the
receivables. Receivables that are 30 days or more past due are considered to
be 'not performing' and the default rebuttable presumption of 90 days
prescribed by IFRS 9 is not applied.
Performing
Customers have a low risk of default and a strong capacity to meet contractual
cash flows.
Underperforming
Receivables for which there is a significant increase in credit risk. A
significant increase in credit risk is presumed if interest and/or principal
repayments are past due.
Not performing
Interest and/or principal repayments are 30 days past due.
The Group's receivables comprise:
2025 2024
£'k £'k
Other debtors 41 32
Total 41 32
The estimated fair values of receivables are the discounted amounts of the
estimated future cash flows expected to be received.
The carrying value of receivables approximates fair value. The provision for
expected credit losses is based on the recoverability of the individual
receivables.
The Group calculated ECL on receivables and has concluded that it is wholly
immaterial and such further disclosure has not been included.
4.4. Credit risk
ACCOUNTING POLICY
Impairment of financial assets
At each reporting date, the Group assesses financial assets measured at
amortised cost and debt securities at FVOCI for impairment. Under IFRS 9, a
'three-stage' model for calculating expected credit losses ("ECL") is used,
and is based on changes in credit quality since initial recognition as
summarised below:
Performing financial assets
‒ Stage 1: From initial recognition of a financial asset to the
date on which an asset has experienced a significant increase in credit risk
relative to its initial recognition, a stage 1 loss allowance is recognised
equal to the credit losses expected to result from its default occurring over
the earlier of the next 12 months or its maturity date ("12-month ECL").
‒ Stage 2: Following a significant increase in credit risk
relative to the initial recognition of the financial asset, a stage 2 loss
allowance is recognised equal to the credit losses expected from all possible
default events over the remaining lifetime of the asset ("Lifetime ECL"). The
assessment of whether there has been a significant increase in credit risk,
such as an actual or significant change in instruments' external credit
rating; significant widening of credit spread; changes in rates or terms of
instrument; existing or forecast adverse change in business, financial or
economic conditions that are expected to cause a significant change in the
counterparty's ability to meet its debt obligations; requires considerable
judgement, based on the lifetime probability of default ("PD"). Stage 1 and 2
allowances are held against performing loans; the main difference between
stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are
estimated using the PD with a maximum period of 12 months, while stage 2
allowances are estimated using the PD over the remaining lifetime of the
asset.
Impaired financial assets
‒ Stage 3: When a financial asset is considered to be
credit-impaired, the allowance for credit losses ("ACL") continues to
represent lifetime expected credit losses; however, interest income is
calculated based on the amortised cost of the asset, net of the loss
allowance, rather than its gross carrying amount.
Application of the impairment model
The Group applies IFRS 9's ECL model to two main types of financial assets
that are measured at amortised cost or FVOCI:
‒ Other receivables, to which the simplified approach
prescribed by IFRS 9 is applied. This approach requires the recognition of a
lifetime ECL allowance on day one.
‒ Debt securities, to which the general three-stage model
(described above) is applied, whereby a 12-month ECL is recognised initially
and the balance is monitored for significant increases in credit risk which
triggers the recognition of a lifetime ECL allowance.
ECLs are a probability-weighted estimate of credit losses. The probability is
determined by the estimated risk of default which is applied to the cash flow
estimates. On a significant increase in credit risk, from investment grade to
non-investment grade, allowances are recognised without a change in the
expected cash flows (although typically expected cash flows do also change)
and expected credit losses are rebased from 12-month to lifetime expectations.
The measurement of ECLs considers information about past events and current
conditions, as well as supportable information about future events and
economic conditions.
Presentation of impairment
Loss allowances for financial assets measured at amortised cost are deducted
from the gross carrying amount of the assets. For debt securities at FVOCI,
the loss allowance is recognised in the Profit or Loss Account and accounted
for as a transfer from OCI to Profit or Loss, instead of reducing the carrying
amount of the asset.
Write-offs
Loans and debt securities are written off (either partially or in full) when
there is no realistic prospect of the amount being recovered. This is
generally the case when the Group concludes that the borrower does not have
assets or sources of income that could generate sufficient cash flows to repay
the amounts subject to the write-off.
Exposure by credit rating
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
UK government bonds - 124,798 - - - - 124,798
Government-backed securities 100,717 - - - - - 100,717
Corporate bonds 1,125 21,008 53,754 24,350 - - 100,237
Receivables - - - - - 41 41
Cash and cash equivalents 10,652 51 14,772 - - - 25,475
Total 112,494 145,857 68,526 24,350 - 41 351,268
AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
UK government bonds - 112,793 - - - - 112,793
Government-backed securities 98,963 4,304 - - - - 103,267
Corporate bonds 1,127 20,050 57,270 16,677 - - 95,124
Receivables - - - - - 32 32
Cash and cash equivalents 13,140 51 18,123 - - - 31,314
Total 113,230 137,198 75,393 16,677 - 32 342,530
With the exception of receivables, all the Group's financial assets are
investment grade (AAA to BBB).
Analysis of credit risk and allowance for ECL
The following table provides an overview of the allowance for ECL provided for
on the types of financial assets held by the Group where credit risk is
prevalent.
Gross carrying amount Allowance for ECL Net amount
At 31 December 2025 £'k £'k £'k
Government bonds 124,798 (3) 124,795
Government-backed securities 100,717 (4) 100,713
Corporate bonds 100,237 (38) 100,199
Receivables 41 - 41
Cash and cash equivalents 25,475 - 25,475
Total 351,268 (45) 351,223
Gross carrying amount Allowance for ECL Net amount
At 31 December 2024 £'k £'k £'k
Government bonds 112,793 (3) 112,790
Government-backed securities 103,267 (4) 103,263
Corporate bonds 95,124 (35) 95,089
Receivables 32 - 32
Cash and cash equivalents 31,314 - 31,314
Total 342,530 (42) 342,488
4.5. Investment income
ACCOUNTING POLICY
Investment income from debt instruments classified as FVOCI are measured using
the effective interest rate which allocates the interest income or interest
expense over the expected life of the asset or liability at the rate that
exactly discounts all estimated future cash flows to equal the instrument's
initial carrying amount. Calculation of the effective interest rate takes into
account fees payable or receivable that are an integral part of the
instrument's yield, premiums or discounts on acquisition or issue, early
redemption fees and transaction costs. All contractual terms of a financial
instrument are considered when estimating future cash flows.
2025 2024
£'k £'k
Interest income on financial assets using effective interest rate method
Interest income from debt securities 10,582 6,458
Interest income from cash and cash equivalents 1,137 1,468
Total 11,719 7,926
4.6. Net gains/(losses) from fair value adjustments on financial assets
ACCOUNTING POLICY
Movements in the fair value of debt instruments classified as FVOCI are taken
through OCI. When the instruments are derecognised, the cumulative gain or
losses previously recognised in OCI is reclassified to Profit or Loss.
2025 2024
£'k £'k
Profit or Loss
Realised gains on derecognition of debt securities measured at FVOCI 7 -
Realised fair value gains on debt securities reclassified to Profit or Loss 7 -
Other Comprehensive Income
Unrealised fair value gains on debt securities 5,522 3,769
Realised gains on derecognition of debt securities reclassified to Profit or (7) -
Loss
Expected credit loss 3 5
Unrealised fair value gains on debt securities through Other Comprehensive 5,518 3,774
Income
Net gains from fair value adjustments on financial assets 5,525 3,774
5. PAYABLES
ACCOUNTING POLICY
Payables are recognised when the Group has a contractual obligation to deliver
cash or another financial asset to another entity, or a contractual obligation
to exchange financial assets or financial liabilities with another entity
under conditions that are potentially unfavourable to the entity. Payables are
carried at amortised cost.
2025 2024
£'k £'k
Trade and other creditors 894 951
Other taxes 6,154 6,044
Total 7,048 6,995
6. LIQUIDITY RISK
Liquidity risk is the potential that obligations cannot be met as they fall
due as a consequence of having a timing mismatch or inability to raise
sufficient liquid assets without suffering a substantial loss on realisation.
The Group manages its liquidity risk through both ensuring that it holds
sufficient cash and cash equivalent assets to meet all short-term liabilities
and matching, as far as possible, the maturity profile of its financial
investments to the expected cash outflows.
The following table analyses the carrying value of cash and cash equivalents
and financial assets, by contractual maturity, which can fund the repayment of
liabilities as they crystallise. It also analyses the undiscounted cash flows
of reinsurance contract assets held, based on the future expected cash flows
to be received in the periods presented.
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
Cash and cash equivalents (1) 25,475 - - - - - 25,475
UK government bonds 38,613 23,451 34,780 19,864 - 8,090 124,798
Government-backed securities 47,100 13,271 14,471 13,464 8,629 3,782 100,717
Corporate bonds 18,931 13,660 30,699 20,175 9,509 7,263 100,237
Receivables 41 - - - - - 41
Reinsurance contract assets 65,594 44,008 36,876 27,018 21,115 72,170 266,781
Total 195,754 94,390 116,826 80,521 39,253 91,305 618,049
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
Cash and cash equivalents (1) 31,314 - - - - - 31,314
UK government bonds 11,810 32,790 19,855 30,628 17,710 - 112,793
Government-backed securities 39,740 38,861 7,929 6,034 10,703 - 103,267
Corporate bonds 37,546 20,366 11,347 19,091 6,230 544 95,124
Receivables 32 - - - - - 32
Reinsurance contract assets 56,652 31,084 18,558 19,662 15,631 60,644 202,231
Total 177,094 123,101 57,689 75,415 50,274 61,188 544,761
(1) Includes money market funds with no notice period for withdrawal
The following table analyses the undiscounted cash flows of insurance
liabilities based on the future cash flows expected to be paid out in the
periods presented, and payables by maturity dates.
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2025 £'k £'k £'k £'k £'k £'k £'k
Payables 7,048 - - - - - 7,048
Insurance contract liabilities ((2)) 101,733 90,478 66,812 46,492 30,264 89,773 425,552
Total 108,781 90,478 66,812 46,492 30,264 89,773 432,600
Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
At 31 December 2024 £'k £'k £'k £'k £'k £'k £'k
Payables 6,995 - - - - - 6,995
Insurance contract liabilities ((2)) 88,992 74,407 42,761 34,427 25,261 77,787 343,635
Total 95,987 74,407 42,761 34,427 25,261 77,787 350,630
(2) Excludes the liability for remaining coverage (unearned premium element)
and effect of discounting
Management has considered the liquidity and cash generation of the Group and
is satisfied that the Group will be able to meet all liabilities as they fall
due.
7. OTHER INCOME
ACCOUNTING POLICY
Other income consists of brokerage fees resulting from the sale of ancillary
products connected to the Group's direct business, and other non-insurance
income such as administrative fees charged on direct business. Such income is
recognised once the related service has been performed. Typically, this will
be at the point of sale of the product.
2025 2024
£'k £'k
Administration fees 314 182
Brokerage and other fee income 323 558
Total 637 740
Brokerage and other fee income relates to auxiliary products and services.
8. OTHER OPERATING EXPENSES
2025 2024
Notes £'k £'k
Employee expenses 8.1 18,161 15,426
Property expenses 503 500
IT expense, including IT depreciation 6,934 6,756
Other depreciation 113 113
Industry levies 5,670 5,994
Policy servicing costs 2,132 3,153
Other operating expenses 3,505 3,399
Movement in expected credit loss on debt securities 3 5
Before adjustment for directly attributable claims expenses 37,021 35,346
Adjusted for:
Reclassification of directly attributable claims expenses (7,171) (7,041)
Total operating expenses 29,850 28,305
8.1. Employee expenses
ACCOUNTING POLICY
A. Pensions
For staff who were employees on 8 February 2002, the Group operates a
non-contributory defined contribution Group personal pension scheme. The
contribution by the Group depends on the age of the employee.
For employees joining since 8 February 2002, the Group operates a matched
contribution Group personal pension scheme where the Group contributes an
amount matching the contribution made by the employee.
Contributions to defined contribution schemes are recognised in the Profit or
Loss Account in the period in which they become payable.
B. Share-based payments
The fair value of equity instruments granted under share‑based payment plans
are recognised as an expense and spread over the vesting period of the
instrument. The total amount to be expensed is determined by reference to the
fair value of the awards made at the grant date, excluding the impact of any
non‑market vesting conditions. Depending on the plan, the fair value of
equity instruments granted is measured on grant date using an appropriate
valuation model or the market price on grant date. At the date of each
Statement of Financial Position, the Group revises its estimate of the number
of equity instruments that are expected to become exercisable. It recognises
the impact of the revision of original estimates, if any, in the Profit or
Loss Account, and a corresponding adjustment is made to equity over the
remaining vesting period. The fair value of the awards and ultimate expense
are not adjusted on a change in market vesting conditions during the vesting
period.
C. Leave pay
Employee entitlement to annual leave is recognised when it accrues to
employees. An accrual is made for the estimated liability for annual leave as
a result of services rendered by employees up to the Statement of Financial
Position date.
The aggregate remuneration of those employed by the Group's operations
comprised:
2025 2024
£'k £'k
Wages and salaries 12,956 11,332
Social security expenses 1,937 1,464
Contributions to defined contribution plans 615 598
Equity-settled share-based payment 2,142 1,607
Other employee expenses 511 425
Before adjustment for directly attributable claims expenses 18,161 15,426
Adjusted for:
Reclassification of directly attributable claims expenses (5,199) (4,799)
Employee expenses 12,962 10,627
8.2. Number of employees
The table below analyses the average monthly number of persons employed by the
Group's operations.
2025 2024
Operations 139 134
Support 34 31
Total 173 165
8.3. Directors' remuneration
Amounts paid to Directors are disclosed within the Annual Report on Directors'
Remuneration on pages 107 to 120 of the 2026 Annual Report and Accounts.
8.4. Auditor's remuneration
The table below analyses the Auditor's remuneration in respect of the Group's
operations.
2025 2024
£'k £'k
Audit of these financial statements 213 205
Audit of financial statements of subsidiaries of the Group 248 253
Total audit fees 461 458
Fees for non-audit services - Audit-related assurance services 89 89
Total non-audit fees 89 89
Total Auditor's remuneration 550 547
The above fees exclude irrecoverable VAT of 20%.
9. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of owned and leased assets that do not
meet the definition of investment property.
2025 2024
£'k £'k
Owner-occupied property 3,600 3,600
Office equipment 442 539
IT equipment 236 65
Total 4,278 4,204
ACCOUNTING POLICY
A. Owner-occupied property
Owner-occupied properties are held by the Group for use in the supply of
services or, for its own administration purposes.
Owner-occupied property is held at fair value. Increases in the carrying
amount of owner-occupied properties as a result of revaluations are credited
to Other Comprehensive Income and accumulated in a revaluation reserve in
equity. To the extent that a revaluation increase reverses a revaluation
decrease that was previously recognised as an expense in Profit or Loss, such
increase is credited to income in Profit or Loss. Decreases in valuation are
charged to Profit or Loss, except to the extent that a decrease reverses the
existing accumulated revaluation reserve and therefore such a decrease is
recognised in Other Comprehensive Income.
A fair value assessment of the owner-occupied property is undertaken at each
reporting date with any material changes in fair value recognised. Valuation
is at highest and best use. Owner-occupied property is also revalued by an
external qualified surveyor, at least every three years. UK properties do not
have frequent and volatile fair value changes and, as such, more frequent
revaluations are considered unnecessary, as only insignificant changes in fair
value is expected.
Owner-occupied land is not depreciated. As the depreciation of owner-occupied
buildings is immaterial and properties are revalued every three years by an
external qualified surveyor, no depreciation is charged on owner-occupied
buildings.
B. Office and IT equipment
Office and IT equipment are stated at historical cost less accumulated
depreciation and impairment charges. Historical cost includes expenditure that
is directly attributable to the acquisition of property and equipment.
Depreciation is calculated on the difference between the cost and residual
value of the asset and is charged to the Profit or Loss Account over the
estimated useful life of each significant part of an item of fixtures,
fittings and IT equipment, using the straight-line basis.
Estimated useful lives are as follows:
Office equipment 3 to 10 years
IT equipment 3 to 5 years
The assets' residual values and useful lives are reviewed at each Statement of
Financial Position date and adjusted if appropriate. An asset's carrying
amount is written down to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount. Gains and losses on
disposals are determined by comparing the proceeds with the carrying amount of
the assets and are included in Profit or Loss before tax.
Repairs and maintenance costs are charged to the Profit or Loss Account during
the financial year in which they are incurred. The cost of major renovations
is included in the carrying amount of the asset when it is probable that
future economic benefits from the renovations will flow to the Group.
Owner- occupied Office equipment IT equipment Total
£'k £'k £'k £'k
Cost/Valuation
At 1 January 2025 4,358 720 487 5,565
Additions/Improvements - 16 237 253
Disposals - - - -
Revaluation - - - -
At 31 December 2025 4,358 736 724 5,818
Accumulated depreciation and impairment
At 1 January 2025 758 181 422 1,361
Depreciation charge for the year - 113 66 179
Disposals - - - -
Impairment losses on revaluation - - - -
At 31 December 2025 758 294 488 1,540
Carrying amount
At 31 December 2025 3,600 442 236 4,278
Owner- occupied Office equipment IT equipment Total
£'k £'k £'k £'k
Cost/Valuation
At 1 January 2024 4,358 720 487 5,565
Additions/Improvements - - - -
Disposals - - - -
Revaluation - - - -
At 31 December 2024 4,358 720 487 5,565
Accumulated depreciation and impairment
At 1 January 2024 758 68 351 1,177
Depreciation charge for the year - 113 71 184
Disposals - - - -
Impairment losses on revaluation - - - -
At 31 December 2024 758 181 422 1,361
Carrying amount
At 31 December 2024 3,600 539 65 4,204
The Group holds two owner-occupied properties, Sabre House and The Old House,
which are both managed by the Group. In accordance with the Group's accounting
policies, owner-occupied buildings are not depreciated. The properties are
measured at fair value which is arrived at on the basis of a valuation carried
out on 16 October 2023 by Hurst Warne and Partners LLP. The valuation was
carried out on an open-market basis in accordance with the Royal Institution
of Chartered Surveyors' requirements, which is deemed to equate to fair value.
While transaction evidence underpins the valuation process, the definition of
market value, including the commentary, in practice requires the valuer to
reflect the realities of the current market. In this context valuers must use
their market knowledge and professional judgement and not rely only upon
historical market sentiment based on historical transactional comparables.
The fair value of the owner-occupied properties was derived using the
investment method supported by comparable evidence. The significant
non-observable inputs used in the valuations are the expected rental values
per square foot and the capitalisation rates. The fair value of the
owner-occupied properties valuation would increase (decrease) if the expected
rental values per square foot were to be higher (lower) and the capitalisation
rates were to be lower (higher).
The fair value measurement of owner-occupied properties of £3,600k (2024:
£3,600k) has been categorised as a Level 3 fair value based on the
non-observable inputs to the valuation technique used.
The following table shows reconciliation to the closing fair value for the
Level 3 owner-occupied property at valuation:
2025 2024
£'k £'k
At 1 January 3,600 3,600
Additions/Improvements - -
Revaluation losses - -
Impairment losses - -
At 31 December 3,600 3,600
The fair value of owner-occupied properties includes a revaluation reserve of
£NIL (2024: £NIL) (excluding tax impact) and is not distributable.
Revaluation losses are charged against the related revaluation reserve to the
extent that the decrease does not exceed the amount held in the revaluation
surplus in respect of the same asset. Any additional losses are charged as an
impairment loss in the Profit or Loss Account. Reversal of such impairment
losses in future periods will be credited to the Profit or Loss Account to the
extent losses were previously charged to the Profit or Loss Account.
The table below shows the impact a 15% decrease in property prices will have
on the Group's profit after tax and equity:
Decrease in profit after tax Decrease In total equity
2025 2024 2025 2024
£'k £'k £'k £'k
Owner-occupied property
Impact of a 15% decrease in property prices (405) (405) (405) (405)
Historical cost model values
If owner-occupied properties were carried under the cost model (historical
costs, less accumulated depreciation and impairment losses), the value of
owner-occupied properties in the balance sheet would have been £3,174k (2024:
£3,229k).
10. INCOME TAX EXPENSE
ACCOUNTING POLICY
The income tax expense in the Profit or Loss Account is based on the taxable
profits for the year. It is Group policy to relieve profits where possible by
the surrender of losses from Group companies with payment for value.
2025 2024
£'k £'k
Current taxation
Charge for the year 13,366 12,157
Charge relating to prior periods 139 570
13,505 12,727
Deferred taxation (Note 11)
Origination and reversal of temporary differences (460) (126)
(460) (126)
Current taxation 13,505 12,727
Deferred taxation (Note 11) (460) (126)
Income tax expense 13,045 12,601
Tax recorded in Other Comprehensive Income is as follows:
2025 2024
£'k £'k
Current taxation - -
Deferred taxation 643 549
643 549
The actual income tax expense differs from the expected income tax expense
computed by applying the standard rate of UK corporation tax of 25.0% (2024:
25.0%) as follows:
2025 2024
£'k £'k
Profit before tax 50,960 48,562
Expected income tax expense 12,740 12,141
Effect of:
Expenses not deductible for tax purposes 14 (86)
Adjustment in respect of prior periods 139 570
Other income tax adjustments 152 (24)
Income tax expense for the year 13,045 12,601
Effective income tax rate 25.6% 25.9%
11. DEFERRED TAX
ACCOUNTING POLICY
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay
more, or a right to pay less or to receive more, tax, with the following
exception.
Deferred tax assets are recognised only to the extent that the Directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences
can be deducted.
Provisions and other temporary differences Depreciation in excess of capital allowances Share-based payments Fair value movements in debt securities at FVOCI Movement in insurance finance reserve Total
£'k £'k £'k £'k £'k £'k
At 1 January 2024 - (180) 468 1,996 (1,596) 688
(Debit)/Credit to the Profit or Loss - 43 88 (5) - 126
(Debit)/Credit to Other Comprehensive Income - - - (944) 395 (549)
At 31 December 2024 - (137) 556 1,047 (1,201) 265
(Debit)/Credit to the Profit or Loss 197 (21) 290 (6) - 460
(Debit)/Credit to Other Comprehensive Income - - - (1,381) 738 (643)
At 31 December 2025 197 (158) 846 (340) (463) 82
2025 2024
£'k £'k
Per Statement of Financial Position:
Deferred tax assets 1,043 1,603
Deferred tax liabilities (961) (1,338)
82 265
12. DIVIDENDS
ACCOUNTING POLICY
Dividend distribution to the Group's shareholders is recognised as a liability
in the Group's financial statements in the period in which the dividend is
approved.
2025 2024
pence per share £'k pence per share £'k
Amounts recognised as distributions to equity holders in the period
Interim dividend for the current year 3.4 8,347 1.7 4,227
Final dividend for the prior year 11.3 27,991 8.1 20,122
14.7 36,338 9.8 24,349
Proposed dividends
Final dividend ((1)) 10.1 24,907 11.3 28,250
(1) Subsequent to 31 December 2025, the Directors declared a final dividend
for 2025 of 10.1p per Ordinary Share subject to approval at the Annual General
Meeting. This dividend will be accounted for as an appropriation of retained
earnings in the year ended 31 December 2026 and is not included as a liability
in the Statement of Financial Position as at 31 December 2025.
The trustees of the employee share trusts waived their entitlement to
dividends on shares held in the trusts to meet obligations arising on share
incentive schemes, which reduced the dividends paid for the year ended 31
December 2025 by £337k (2024: £151k).
13. OTHER ASSETS
2025 2024
£'k £'k
Prepayments and accrued income 799 778
Total 799 778
The carrying value of other assets approximates to fair value. There are no
amounts expected to be recovered more than 12 months after the reporting date.
14. GOODWILL
ACCOUNTING POLICY
Goodwill has been recognised in acquisitions of subsidiaries and represents
the difference between the cost of the acquisition and the fair value of the
net identifiable assets acquired. Goodwill is stated at cost less any
accumulated impairment losses.
Impairment of goodwill
The Group performs an annual impairment review which involves comparing the
carrying amount to the estimated recoverable amount and recognising an
impairment loss if the recoverable amount is lower than the carrying amount.
Impairment losses are recognised through the Profit or Loss Account and are
not subsequently reversed.
The recoverable amount is the greater of the fair value of the asset less
costs to sell and the value in use.
The value in use calculations use cash flow projections based on financial
budgets approved by management.
On 3 January 2014, the Group acquired Binomial Group Limited, the parent of
Sabre Insurance Company Limited, for a consideration of £245,485k satisfied
by cash. As from 1 January 2014, the date of transition to IFRS, goodwill was
no longer amortised but is subject to annual impairment testing. Impairment
testing involves comparing the carrying value of the net assets and goodwill
against the recoverable amount.
The goodwill recorded in respect of this transaction at the date of
acquisition was £156,279k. There has been no impairment to goodwill since
this date, and no additional goodwill has been recognised by the Group.
The Group performed its annual impairment test as at 31 December 2025 and 31
December 2024. The Group considers the relationship between the Group's market
capitalisation and the book value of its subsidiary undertakings, among other
factors, when reviewing for indicators of impairment.
Key assumptions
The valuation uses fair value less cost to sell. The key assumption on which
the Group has based this value is:
The market capitalisation of the Group as at 31 December 2025 of £320,580k
(31 December 2024: £345,000k).
The Directors concluded that the recoverable amount of the business unit would
remain in excess of its carrying value even after reasonably possible changes
in the key inputs and assumptions affecting its market value, such as a
significant fall in demand for its products or a significant adverse change
in the volume of claims and increase in other expenses, before the recoverable
amount of the business unit would reduce to less than its carrying value.
Therefore, the Directors are of the opinion that there are no indicators of
impairment as at 31 December 2025.
15. SHARE CAPITAL
2025 2025 2024 2024
Authorised share capital Number of shares £ Number of shares £
250,000,000 Ordinary Shares of £0.001 each 250,000,000 250,000 250,000,000 250,000
Issued ordinary share capital (fully paid up) Number of shares Share capital
£
As at 1 January 2025 250,000,000 250,000
Cancellation of shares under share buyback programme (3,400,000) (3,400)
As at 31 December 2025 246,600,000 246,600
Issued ordinary share capital (fully paid up) Number of shares Share capital
£
As at 1 January 2024 250,000,000 250,000
Cancellation of shares under share buyback programme - -
As at 31 December 2024 250,000,000 250,000
All shares are unrestricted and carry equal voting rights.
Share buyback
During the year the Group executed a share buyback programme. A total of
3,400,000 Ordinary Shares (representing 1.36% of Sabre Insurance Group plc's
issued share capital as at 31 December 2024) were purchased under this
programme for cancellation at a total cost of £5,067,110.46 including costs,
at an average share price of 146.19p per share, excluding any costs.
Own shares
Own shares are shares in Sabre Insurance Group plc that are held by the Sabre
Insurance Group Employee Benefit Trust ("EBT") for the purpose of issuing
shares under the Group's equity-settled share-based schemes (refer to Note 16
for further information).
Shares bought/(sold) on open market
Number of shares £
As at 1 January 2024 1,589,250 3,120,534
Shares purchased 986,377 1,483,654
Shares vested (612,919) (1,491,750)
As at 31 December 2024 1,962,708 3,112,438
Shares purchased 865,000 1,068,920
Shares vested (534,606) (827,383)
As at 31 December 2025 2,293,102 3,353,975
In thousands £'k
31 December 2024 3,112
31 December 2025 3,354
Shares issued to employees are recognised on a first-in-first-out basis.
As at 31 December 2025, The Sabre Insurance Group Employee Benefit Trust held
2,293,102 (2024:1,962,708) of the 246,600,000 issued Ordinary Shares with a
nominal value of £2,293.10 (2024: £1,962.71) in connection with the
operation of the Group's share plans. Refer to Notes 16 and 17 for additional
information on own shares held.
16. SHARE-BASED PAYMENTS
The Group operates equity-settled share-based schemes for all employees in the
form of a Long Term Incentive Plan ("LTIP"), Deferred Bonus Plan ("DBP") and
Share Incentive Plans ("SIP"), including Free Shares and Save As You Earn
("SAYE"). The shares are in the ultimate Parent Company, Sabre Insurance Group
plc.
The Group recognised a total expense in the Profit or Loss for the year ended
31 December 2025 of £2,142k (2024: £1,607k), relating to equity-settled
share-based plans.
Long Term Incentive Plan ("LTIP")
The LTIP is a discretionary share plan, under which the Board may grant
share-based awards ("LTIP Awards") to incentivise and retain
eligible employees.
LTIP Awards - Restricted Share Awards ("RSAs")
From 2021, the Group no longer issues awards under the LTIP Awards with
performance conditions, but instead issues RSAs.
The RSAs are structured as nil-cost rewards, to receive free shares on
vesting. Shares will normally vest three years after grant date, subject to
continued employment and the satisfaction of pre-determined underpins. Awards
are also subject to an additional two-year holding period, so that the total
time prior to any potential share sale (except to meet any tax liabilities
arising from the award) will generally be five years.
The total number of shares awarded under the scheme was 1,263,061 (2024:
935,780) with an estimated fair value at grant date of £1,554k (2024:
£1,581k). The fair value is based on the closing share price on the grant
date.
Future dividends are accrued separately and are not reflected in the fair
value of the grant.
The table below details the movement in the RSA:
Number of shares Weighted Average Exercise Price
Outstanding at 1 January 2024 2,227,222 NIL
Granted 935,780 NIL
Forfeited (40,863) NIL
Vested (441,684) NIL
Outstanding at 31 December 2024 2,680,455 NIL
Granted 1,263,061 NIL
Forfeited (19,715) NIL
Vested (523,443) NIL
Outstanding at 31 December 2025 3,400,358 NIL
The average unexpired life of RSAs is 1.3 years (2024: 1.3 years).
Deferred Bonus Plan ("DBP")
To encourage behaviour which does not benefit short-term profitability over
longer-term value, Directors and some key staff were awarded shares in lieu of
a bonus, to be deferred for two years, using the market value at the grant
date. The total number of shares awarded under the scheme was 631,156 (2024:
218,033) with an estimated fair value of £776k (2024: £374k). Of this award,
the number of shares awarded to Directors and Persons Discharging Managerial
Responsibilities ("PDMRs") was 592,547 (2024: 204,392) with an estimated fair
value of £729k (2024: £351k). Fair values are based on the share price at
grant date. All shares are subject to a two-year service period and are not
subject to performance conditions.
Future dividends are accrued separately and are not reflected in the fair
value of the grant. The DBP is recognised in the Profit or Loss Account on a
straight-line basis over a period of two years from grant date.
Share Incentive Plans ("SIPs")
The Sabre SIPs provide for the award of free Sabre Insurance Group plc shares,
Partnership Shares (shares bought by employees under the matching scheme),
Matching Shares (free shares given by the employer to match partnership
shares) and Dividend Shares (shares bought for employees with proceeds of
dividends from partnership shares). The shares are owned by the Employee
Benefit Trust to satisfy awards under the plans. These shares are either
purchased on the market and carried at fair value or issued by the Parent
Company to the trust.
Matching Shares
The Group has a Matching Shares scheme under which employees are entitled to
invest between £10 and £150 each month through the share trust from their
pre-tax pay. The Group supplements the number of shares purchased by giving
employees one free matching share for every three shares purchased up to
£1,800. Matching shares are subject to a three-year service period before the
matching shares are awarded. Dividends are paid on shares, including matching
shares, held in the trust by means of dividends shares. The fair value of such
awards is estimated to be the market value of the awards on grant date.
In the year ended 31 December 2025, 12,342 (2024: 11,464) matching shares were
granted to employees with an estimated fair value of £16k (2024: £16k).
As at 31 December 2025, 57,990 (2024: 48,134) matching shares were held on
behalf of employees with an estimated fair value of £75k (2024: £66k). The
average unexpired life of Matching Share awards is 1.4 years (2024: 1.5
years).
Save as You Earn ("SAYE")
The SAYE scheme allows employees to enter into a regular savings contract of
between £5 and £500 per month over a three-year period, coupled with a
corresponding option over shares. The grant price is equal to 80% of the
quoted market price of the shares on the invitation date. The participants of
the SAYE scheme are not entitled to dividends and therefore dividends are
excluded from the valuation of the SAYE scheme.
Estimated fair value of options at grant date:
SAYE 2023: 49 pence
SAYE 2024: 33 pence
SAYE 2025: 26 pence
The following table lists the inputs to the Black-Scholes model used to value
the awards granted in respect of the 2024 SAYE scheme.
2025 SAYE
Share price at grant date 128.0 pence
Expected term 3 years
Expected volatility(1) 31.5%
Continuously compounded risk-free rate 3.8%
Continuously compounded dividend yield 8.0%
Strike price at grant date 101.2 pence
(1) Volatility has been estimated using the historical daily average
volatility of the share price of the Group for the year immediately preceding
the grant date.
The table below details the movement in the SAYE scheme:
Number of shares Weighted Average Exercise Price
Outstanding at 1 January 2024 858,405 1.33
Granted 102,880 1.42
Forfeited (49,001) NIL
Vested - NIL
Outstanding at 31 December 2024 912,284 0.99
Granted 246,676 1.01
Forfeited (139,200) NIL
Vested (11,163) 0.85
Outstanding at 31 December 2025 1,008,597 0.94
The average unexpired life of the SAYE scheme is 1.5 years (2024: 1.5 years).
17. RESERVES
Own shares
Sabre Insurance Group plc established an Employee Benefit Trust ("EBT") in
2017 in connection with the operation of its share plans. The investment in
own shares as at 31 December 2025 was £3,354k (2024: £3,112k). The market
value of the shares in the EBT as at 31 December 2025 was £2,981k (2024:
£2,709k).
Merger reserve
Sabre Insurance Group plc was incorporated as a limited company on 21
September 2017. On 11 December 2017, immediately prior to the Group's listing
on the London Stock Exchange, Sabre Insurance Group plc acquired the entire
share capital of the former ultimate Parent Company of the Group, Barbados
TopCo Limited ("TopCo"). As a result, Sabre Insurance Group plc became the
ultimate parent of the Sabre Insurance Group. The merger reserve resulted from
this corporate reorganisation.
FVOCI reserve
The FVOCI reserve records the unrealised gains and losses arising from changes
in the fair value of debt securities at FVOCI. The movements in this reserve
are detailed in the Consolidated Statement of Comprehensive Income.
Revaluation reserve
The revaluation reserve records the fair value movements of the Group's
owner-occupied properties. Refer to Note 9 for more information on the
revaluation of owner-occupied properties.
Insurance/Reinsurance finance reserve
The insurance finance reserve comprises the cumulative insurance finance
income and expenses recognised in Other Comprehensive Income.
Share-based payments reserve
The Group's share-based payments reserve records the value of equity-settled
share-based payment benefits provided to the Group's employees as part of
their remuneration that has been charged through the income statement. Refer
to Note 16 for more information on share-based payments.
18. RELATED PARTY TRANSACTIONS
Sabre Insurance Group plc is the ultimate parent and ultimate controlling
party of the Group. The following entities included below form the Group.
Name Principal business Registered address
Entities in which the Group holds 100% of the issued share capital
Binomial Group Limited Intermediate holding company Sabre House, 150 South Street, Dorking, Surrey, RH4 2YY, United Kingdom
Sabre Insurance Company Limited Motor insurance underwriter Sabre House, 150 South Street, Dorking, Surrey, RH4 2YY, United Kingdom
Other controlled entities
Sabre 2017 Share Incentive Plan Employee Benefit Trust Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom
The Sabre Insurance Group Employee Benefit Trust Employee Benefit Trust Ocorian, 26 New Street, St Helier, JE2 3RA, Jersey
No single party holds a significant influence (>20%) over Sabre Insurance
Group plc.
Both Employee Benefit Trusts ("EBTs") were established to assist in the
administration of the Group's employee equity-based compensation schemes. The
UK registered EBT holds the all-employee SIP. The Jersey-registered EBT holds
the Long Term Incentive Plan ("LTIP") and Deferred Bonus Plan ("DBP").
While the Group does not have legal ownership of the EBTs and the ability of
the Group to influence the actions of the EBTs is limited to a trust deed, the
EBT was set up by the Group with the sole purpose of assisting in the
administration of these schemes, and is in essence controlled by the Group and
therefore consolidated.
During the period ended 31 December 2025, the Group donated no shares to the
EBTs (2024: NIL).
Key management compensation
Key management includes Executive Directors, Non-executive Directors and
Directors of subsidiaries which the Group considers to be senior management
personnel. Further details of Directors' shareholdings and remuneration can be
found in the Annual Report on Directors' Remuneration on pages 107 to 120 of
the 2026 Annual Report and Accounts.
The aggregate amount paid to Directors during the year was as follows.
2025 2024
£'k £'k
Remuneration 3,697 3,428
Contributions to defined contribution pension scheme 10 10
Shares granted under LTIP 1,030 954
Total 4,737 4,392
19. EARNINGS PER SHARE
Basic earnings per share
2025 2024
After tax Per share After tax Per share
£'k pence £'k pence
Profit for the year attributable to ordinary shareholders 37,915 15.37 35,961 14.48
Diluted earnings per share
2025
After tax Weighted average number of shares (000s) Per share pence
£'k
Profit for the year attributable to ordinary shareholders 37,915 246,668 15.37
Net share awards allocable for no further consideration 1,760 (0.11)
Total diluted earnings 248,428 15.26
2024
After tax Weighted average number of shares (000s) Per share pence
£'k
Profit for the year attributable to ordinary shareholders 35,961 248,419 14.48
Net share awards allocable for no further consideration 1,880 (0.11)
Total diluted earnings 250,299 14.37
20. EVENTS AFTER THE BALANCE SHEET DATE
Other than the declaration of a final dividend as disclosed in Note 12, there
have been no material changes in the affairs or financial position of the
Group and its subsidiaries since the Statement of Financial Position date.
Parent Company Statement of Financial Position
As at 31 December 2025
2025 2024
Notes £'k £'k
Assets
Cash and cash equivalents 45 282
Receivables 2 3 27
Other assets 21 11
Investments 3 455,355 453,213
Total assets 455,424 453,533
Liabilities
Payables 4 169 721
Other liabilities 104 109
Total liabilities 273 830
Equity
Share capital 247 250
Own shares (3,354) (3,112)
Merger reserve 236,949 236,949
Share-based payments reserve 3,495 2,620
Retained earnings 217,814 215,996
Total equity 455,151 452,703
Total liabilities and equity 455,424 453,533
No income statement is presented for Sabre Insurance Group plc as permitted by
section 408 of the Companies Act 2006. The profit after tax of the Parent
Company for the period was £42,772k (2024: £25,604k profit after tax).
Parent Company Statement of Changes in Equity
For the year ended 31 December 2025
Share capital Own shares Merger reserve Share-based payments reserve Retained earnings Total equity
Notes £'k £'k £'k £'k £'k £'k
Balance as at 1 January 2024 250 (3,121) 236,949 2,686 214,558 451,322
Profit for the period attributable to the owners of the Company - - - - 25,604 25,604
Share-based payment expense - - - (66) 183 117
Net movement in own shares - 9 - - - 9
Share buyback - - - - - -
Dividends paid - - - - (24,349) (24,349)
Balance as at 31 December 2024 250 (3,112) 236,949 2,620 215,996 452,703
Profit for the period attributable to the owners of the Company - - - - 42,771 42,771
Share-based payment expense - - - 875 449 1,324
Net movement in own shares - (242) - - - (242)
Share buyback 5 (3) - - - (5,064) (5,067)
Dividends paid - - - - (36,338) (36,338)
Balance as at 31 December 2025 247 (3,354) 236,949 3,495 217,814 455,151
Parent Company Statement of Cash Flows
For the year ended 31 December 2025
2025 2024
£'k £'k
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year 42,771 25,604
Operating cash flows before movements in working capital 42,771 25,604
Movements in working capital:
Change in receivables 24 14
Change in other assets (10) 22
Change in payables (552) 721
Change in other liabilities (5) (269)
Net cash generated from operating activities 42,228 26,092
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash used in acquiring and disposing of own shares (1,069) (1,484)
Options exercised under share option schemes 9 -
Share buyback (5,067) -
Dividends paid (36,338) (24,349)
Net cash used by financing activities (42,465) (25,833)
Net (decrease)/increase in cash and cash equivalents (237) 259
Cash and cash equivalents at the beginning of the year 282 23
Cash and cash equivalents at the end of the year 45 282
Notes To The Parent Company Financial Statements
For the year ended 31 December 2025
1. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these
Consolidated and Company Financial Statements are included in the specific
notes to which they relate. These policies have been consistently applied to
all the years presented, unless otherwise indicated.
1.1. Basis of preparation
These financial statements present the Sabre Insurance Group plc Company
Financial Statements for the period ended 31 December 2025, comprising the
Parent Company Statement of Financial Position, Parent Company Statement of
Changes in Equity, Parent Company Statement of Cash Flows, and related notes.
The financial statements of the Company have been prepared in accordance with
UK-adopted international accounting standards, comprising International
Accounting Standards ("IAS") and International Financial Reporting Standards
("IFRS"), and the requirements of the Companies Act 2006. Endorsement of
accounting standards is granted by the UK Endorsement Board ("UKEB").
In accordance with the exemption permitted under section 408 of the Companies
Act 2006, the Company's Profit or Loss Account and related notes have not been
presented in these separate financial statements.
The financial statements are prepared in accordance with the going concern
principle using the historical cost basis, except for those financial assets
that have been measured at fair value.
The financial statements values are presented in pounds sterling (£) rounded
to the nearest thousand (£'k), unless otherwise indicated.
The accounting policies that are used in the preparation of these separate
financial statements are consistent with the accounting policies used in the
preparation of the Consolidated Financial Statements of Sabre Insurance Group
plc as set out in those financial statements.
As permitted by section 408 of the Companies Act 2006, the Statement of
Comprehensive Income of the Parent Company is not presented. The additional
accounting policies that are specific to the separate financial statements of
the Company are set out below.
2. RECEIVABLES
2025 2024
£'k £'k
Due within one year
Other debtors 3 27
As at 31 December 3 27
3. INVESTMENTS
The Company's financial assets are summarised below:
2025 2024
£'k £'k
Investment in subsidiary undertakings 455,355 453,213
Total 455,355 453,213
3.1. Investment in subsidiary undertakings
ACCOUNTING POLICY - INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Investment in subsidiaries is stated at cost less any impairment.
2025 2024
£'k £'k
As at 1 January 453,213 451,606
Additions 2,142 1,607
As at 31 December 455,355 453,213
The only operating insurance subsidiary of the Company is Sabre Insurance
Company Limited, from which the value of the Group is wholly derived, as there
are no other trading entities within the Group. The Company performed its
annual impairment test as at 31 December 2025 and 31 December 2024. The
Company considers the relationship between the Group's market capitalisation
and the book value of its subsidiary undertakings, among other factors, when
reviewing for indicators of impairment. As at 31 December 2025 and 31 December
2024, the Company's securities were traded on a liquid market; therefore,
market capitalisation could be used as an indicator of value.
Having carried out this assessment, the Board concluded, on the basis of the
cautious assumptions outlined below, that the value in use is higher than the
current carrying value of the investment in subsidiary and no impairment is
necessary.
Key assumptions
We have used a dividend discount model to estimate the value in use, wherein
dividend payments are discounted to the present value. Dividends have been
estimated, based on forecasted financial information, over a four-year
forecast period, with a terminal growth rate applied. The key assumptions used
in the preparation of future cash flows are: plan-period financial
performance, dividend payout ratio, long-term growth rates and discount rate.
The key assumptions used in the calculation for the value in use is set out
below:
‒ Plan period financial performance set in line with the
Group's expectations
‒ Dividend payout ratio in line with the Group's strategy
‒ Long-term growth rate beyond the plan period of 2%
‒ Discount rate of 8.4%, being a calculated cost of capital
using market rate returns of Sabre and comparable insurers
These calculations use post-tax cash flow projections based on the Group's
capital models. As the value in use exceeds the carrying amount, the
recoverable amount remains supportable.
The Group has conducted sensitivity testing to the recoverable amount, in
order to understand the relevance of these various factors in arriving at the
value in use.
‒ Dividend within the plan period - To assess the impact of
reasonable changes in performance on our base case impairment analysis and
headroom, we flexed the dividend within the plan period by +10% and -10%. In
doing so, the value in use varied by approximately 10% around the central
scenario.
‒ Long-term growth rate - To assess the impact of reasonable
changes in the long-term growth rate on our base case impairment analysis and
headroom, we flexed the long-term growth rate by +1% and -1%. In doing so, the
value in use varied by approximately 8%-11% around the central scenario.
‒ Discount rate - To assess the impact of reasonable changes
in the dividend payout ratio on our base case impairment analysis and
headroom, we flexed the average discount rate by +2% and -2%. In doing so, the
value in use varied by approximately 24% (up) and 47% (down) around the
central scenario.
In all these scenarios there is material headroom over the carrying value of
the investment in subsidiary.
Name of subsidiary Place of incorporation Principal activity
Directly held by the Company
Binomial Group Limited United Kingdom Intermediate holding company
Indirectly held by the Company
Sabre Insurance Company Limited United Kingdom Motor insurance underwriter
The registered office of each subsidiary is disclosed within Note 18 of the
consolidated Group Financial Statement.
4. PAYABLES
2025 2024
£'k £'k
Due within one year
Amounts due to Group undertakings 169 721
As at 31 December 169 721
5. SHARE CAPITAL AND RESERVES
Full details of the share capital and the reserves of the Company are set out
in Note 15 and Note 17 to the Consolidated Financial Statements.
6. DIVIDEND INCOME
ACCOUNTING POLICY - DIVIDEND INCOME
Dividend income from investment in subsidiaries is recognised when the right
to receive payment is established.
7. RELATED PARTY TRANSACTIONS
Sabre Insurance Group plc, which is incorporated in the United Kingdom and
registered in England and Wales, is the ultimate parent undertaking of the
Sabre Insurance Group of companies.
The following balances were outstanding with related parties at year end:
2025 2024
£'k £'k
Due to
Sabre Insurance Company Limited 169 721
Total 169 721
The outstanding balance represents cash transactions effected by Sabre
Insurance Company Limited on behalf of its Parent Company, and will be settled
within one year.
8. SHARE-BASED PAYMENTS
Full details of share-based compensation plans are provided in Note 16 to the
Consolidated Financial Statements.
9. RISK MANAGEMENT
The risks faced by the Company, arising from its investment in subsidiaries,
are considered to be the same as those presented by the operations of the
Group. Details of the key risks and the steps taken to manage them are
disclosed in Note 2 to the Consolidated Financial Statements.
10. DIRECTORS' AND KEY MANAGEMENT REMUNERATION
The Directors and key management of the Group and the Company are the same.
The aggregate emoluments of the Directors and the remuneration and pension
benefits payable in respect of the highest paid Director are included in the
Directors' Remuneration Report in the Governance section of the Annual Report
and Accounts.
Financial Reconciliations
GROSS WRITTEN PREMIUM
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Movement in unearned premium (11,649) (7,203) 40,590
Gross written premium 202,900 236,435 225,098
NET LOSS RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Insurance service expense 174,491 154,661 139,497
Less: Amortisation of insurance acquisition cash flows (16,753) (18,166) (14,057)
Less: Amounts recoverable from reinsurers for incurred claims (54,552) (13,026) (31,532)
Less: Directly attributable claims expenses (7,171) (7,041) (6,085)
Add: Net impact of discounting 7,068 6,914 8,201
Undiscounted net claims incurred 103,083 123,342 96,024
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net earned premium 190,677 210,021 156,002
Net loss ratio 54.1% 58.7% 61.6%
EXPENSE RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Other operating expenses 29,850 28,305 26,587
Add: Amortisation of insurance acquisition cash flows 16,753 18,166 14,057
Add: Directly attributable claims expenses 7,171 7,041 6,085
Total operating expenses 53,774 53,512 46,729
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net earned premium 190,677 210,021 156,002
Expense ratio 28.2% 25.5% 30.0%
COMBINED OPERATING RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Net loss ratio 54.1% 58.7% 61.6%
Expense ratio 28.2% 25.5% 30.0%
Combined operating ratio 82.3% 84.2% 91.6%
DISCOUNTED NET LOSS RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Insurance service expense 174,491 154,661 139,497
Less: Amortisation of insurance acquisition cash flows (16,753) (18,166) (14,057)
Less: Amounts recoverable from reinsurers for incurred claims (54,552) (13,026) (31,532)
Less: Directly attributable claims expenses (7,171) (7,041) (6,085)
Net claims incurred 96,015 116,428 87,823
Insurance revenue 217,990 248,131 188,246
Less: Instalment income (3,441) (4,493) (3,738)
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net earned premium 190,677 210,021 156,002
Discounted net loss ratio 50.4% 55.4% 56.3%
DISCOUNTED COMBINED OPERATING RATIO
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Net loss ratio 50.4% 55.4% 56.3%
Expense ratio 28.2% 25.5% 30.0%
Discounted combined operating ratio 78.6% 80.9% 86.3%
NET INSURANCE MARGIN
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
Net claims incurred 103,083 123,342 96,024
Total operating expenses 53,774 53,512 46,729
Total insurance expense 156,857 176,854 142,753
Insurance revenue 217,990 248,131 188,246
Less: Reinsurance expense (23,872) (33,617) (28,506)
Net insurance revenue 194,118 214,514 159,740
Net insurance margin 19.2% 17.6% 10.6%
RETURN ON TANGIBLE EQUITY
For the year ended 31 December
2025 2024 2023
£'k £'k £'k
IFRS net assets at year end 257,862 258,346 242,412
Less: Goodwill at year end (156,279) (156,279) (156,279)
Closing tangible assets 101,583 102,067 86,133
Opening tangible equity 102,067 86,133 72,709
Average tangible equity 101,825 94,100 79,421
Profit after tax 37,915 35,961 18,065
Return on tangible equity 37.2% 38.2% 22.7%
SOLVENCY COVERAGE RATIO - PRE-DIVIDEND
As at 31 December
2025 2024 2023
£'k £'k £'k
Solvency II net assets 133,080 134,695 121,099
Solvency capital requirement 66,986 62,199 58,998
Solvency coverage ratio - pre-dividend 198.7% 216.6% 205.3%
SOLVENCY COVERAGE RATIO - POST-DIVIDEND
As at 31 December
2025 2024 2023
£'k £'k £'k
Solvency II net assets 133,080 134,695 121,099
Less: Interim/Final dividend (24,907) (28,250) (20,250)
Solvency II net assets - post-dividend 108,173 106,445 100,849
Solvency capital requirement 66,986 62,199 58,998
Solvency coverage ratio - post-dividend 161.5% 171.1% 170.9%
Glossary of Terms
Acquisition cash flows Cash flows arising from the costs of selling, underwriting and starting a
group of insurance contracts (issued or expected to be issued) that are
directly attributable to the portfolio of insurance contracts to which the
group belongs. Such cash flows include cash flows that are not directly
attributable to individual contracts or groups of insurance contracts within
the portfolio.
Adjusted IFRS net assets Equals the Group's IFRS net assets, less Goodwill.
Asset for incurred claims ("AIC") The reinsurers' share of the liability for incurred claims ("LIC").
Asset for remaining coverage ("ARC") The reinsurers' share of the liability for remaining coverage ("LRC").
Combined operating ratio ("COR") The combined operating ratio is the ratio of total expenses (which comprises
commission expenses and operating expenses), and net insurance claims relative
to net earned premium ("NEP"), expressed as a percentage.
Contractual service margin ("CSM") This represents the unearned profit the entity will recognise as it provides
insurance contract service under the insurance contracts in the group. It is a
component of the carrying amount of the asset or liability for a group of
insurance contracts.
Coverage period The period during which the entity provides insurance contract services. The
period includes the insurance contract services that relate to all premiums
within the boundary of the insurance contract.
Effective tax rate Effective tax rate is defined as the approximate tax rate calculated by
dividing the Group's profit before tax by the tax charge going through the
Profit or Loss Account.
Expense ratio Expense ratio is a measure of total expenses (which comprises commission
expenses and operating expenses), and claims handling expenses, relative to
net earned premium ("NEP"), expressed as a percentage.
Fair value through OCI ("FVOCI") Unrealised gains and losses from the remeasurement of the fair value financial
assets are recognised in the Statement of Other Comprehensive Income ("OCI").
Financial Reporting Council ("FRC") The UK's regulator for the accounting, audit and actuarial professions,
promoting transparency and integrity in business.
Fulfilment cash flows ("FCF") An explicit, unbiased and probability-weighted estimate (i.e. expected value)
of the present value of the future cash outflows minus the present value of
the future cash inflows that will arise as the entity fulfils insurance
contracts, including a risk adjustment for non-financial risk.
Greenhouse Gas (GHG) Gases in the atmosphere that absorb and re‑emit infrared radiation, trapping
heat and contributing to the greenhouse effect.
Gross earned premium ("GEP") The proportions of premium attributable to the periods of risk that relate to
the current accounting period. It represents gross written premium ("GWP")
adjusted by the unearned premium provision at the beginning and end of the
accounting period, before deduction of reinsurance expense.
Gross written premium ("GWP") Gross written premium comprises all premiums in respect of policies
underwritten in a particular financial year, regardless of whether such
policies relate in whole or in part to a future financial year, before
deduction of reinsurance expense.
IFRS 17 "Insurance Contracts" An accounting standard that addresses the establishment of principles for the
recognition, measurement, presentation and disclosure of insurance contracts
within the scope of the standard (effective 1 January 2023).
IFRS net assets The difference between the Group's total assets and total liabilities.
Insurance revenue Gross earned premium ("GEP") plus instalment income.
International Financial Reporting Standards ("IFRS") Accounting standards issued by the IFRS Foundation and the International
Accounting Standards Board ("IASB").
Liability for incurred claims ("LIC") An entity's obligation to:
a) Investigate and pay valid claims for insured events that have already
occurred, including events that have occurred but for which claims have not
been reported, and other incurred insurance expenses; and
b) Pay amounts that are not included in (a) and that relate to:
i. insurance contract services that have already been provided;
or
ii. any investment components or other amounts that are not
related to the provision of insurance contract services and that are not in
the liability for remaining coverage.
Liability for remaining coverage ("LRC") An entity's obligation to:
a) investigate and pay valid claims under existing insurance contracts for
insured events that have not yet occurred (i.e. the obligation that relates
to the unexpired portion of the insurance coverage); and
b) pay amounts under existing insurance contracts that are not included in (a)
and that relate to:
i. insurance contract services not yet provided (i.e. the obligations that
relate to future provision of insurance contract services); or
ii. any investment components or other amounts that are not related to the
provision of insurance contract services and that have not been transferred to
the liability for incurred claims.
Net claims incurred Net claims incurred is equal to gross claims incurred less amounts recovered
from reinsurers.
Net earned premium ("NEP") Gross earned premium ("GEP") less reinsurance expense.
Net insurance margin ("NIM") Net insurance margin measures how much net insurance profit is generated as a
percentage of net insurance revenue.
Net insurance revenue Insurance revenue less reinsurance expense.
Net loss ratio ("NLR") Net loss ratio measures net insurance claims, less claims handling expenses,
relative to net earned premium expressed as a percentage.
Network for Greening the Financial System (NGFS) A global coalition of central banks and financial supervisors working to
develop climate‑ and nature‑related risk management frameworks and to
mobilise finance for a sustainable economy.
Own Risk and Solvency Assessment ("ORSA") A prospective assessment of the Group's risks and solvency capital
requirements.
Periodic Payment Order ("PPO") A compensation award as part of a claims settlement that involves making a
series of annual payments to a claimant over their remaining life to cover the
costs of the care they will require.
Premium allocation approach ("PAA") Method for measuring insurance contracts under IFRS 17 "Insurance Contracts".
Representative Concentration Pathways (RCPs) Climate‑change scenarios used to model future greenhouse‑gas
concentrations and their associated radiative forcing levels.
Return on tangible equity Return on tangible equity is measured as the ratio of the Group's profit after
tax to its average tangible equity over the financial year, expressed as a
percentage.
Risk adjustment for non-financial risk The compensation an entity requires for bearing the uncertainty about the
amount and timing of the cash flows that arises from non-financial risk as the
entity fulfils insurance contracts.
Shared Socioeconomic Pathways (SSPs) Global scenarios describing possible future socioeconomic developments up to
2100, used in climate research to assess how demographic, economic,
technological, and policy trends influence greenhouse‑gas emissions and
climate risks.
Solvency capital ratio The ratio of Own Funds (Solvency II capital) to Solvency Capital Requirement
"SCR".
Solvency Capital Requirement ("SCR") The total amount of capital that the Group must hold to cover the risks under
the Solvency II regulatory framework. The Group is required to maintain
eligible own funds of at least 100% of the SCR.
The Group uses the Standard Formula to determine the SCR.
WBCSD/WRI Scopes The three categories of greenhouse gas (GHG) emissions defined under the GHG
Protocol, the globally recognized standard for corporate carbon accounting.
The protocol was jointly developed by the World Resources Institute (WRI) and
the World Business Council for Sustainable Development (WBCSD).
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