Sabre Insurance expecting recovery after first-half profits fall

Sabre Insurance announced an interim dividend of 2.8p per share on Tuesday, down from 3.7p a year ago but in line with its policy, after reporting a strong balance sheet and a fall in profits.

The London-listed firm said gross written premiums in the first half totalled £91.8m, up from £78.2m year-on-year, while its combined operating ratio rose to 98.9% from 74.4%.

Its adjusted profit before tax tumbled to £4.3m for the six months ended 30 June, from £22.2m a year ago, while its annualised return on tangible equity slid to 8.5% from 33.5%.

Its solvency coverage ratio post-dividend was 160%, compared to 169% at the same time last year.

“We are pleased to report that we remain profitable and continue to generate capital and hold firm our view that such capital should be distributed to shareholders by way of a dividend where it is not required to grow or develop the business,” said chief executive officer Geoff Carter.

“Following the payment of the dividend, we remain at the top of our preferred solvency capital range of 140% to 160%.”

Carter said the company was “comfortable” that distributing capital that would leave Sabre within its capital range provided “sufficient cover” against any future capital strain, and as such the board expected to be able to pay a further dividend for the full-year.

“Having taken decisive pricing action ahead of the market, we are confident that significant impacts of extraordinary, rapid inflation will be limited to 2022, with a rebound in profitability for 2023 and beyond.”

At 0915 BST, shares in Sabre Insurance Group were up 2.54% at 105p.

Reporting by Josh White at Sharecast.com.