Sabre Insurance FY profit falls; special dividend deferred due to pandemic

Sabre Insurance reported a drop in full-year profit on Tuesday as gross written premiums declined, and said it was withholding its special dividend until there is more clarity on the impact of the Covid-19 outbreak.

In the year to the end of December 2019, pre-tax profit fell to £56.5m from £61.4m as gross written premiums declined to £197m from £210m in 2018.

The private motor insurance underwriter said it had put in a "robust" financial performance during a "very challenging" stage of the car insurance market cycle.

Sabre said that while the coronavirus pandemic is not currently expected to generate any significant adverse capital strain, "unforeseeable challenges could emerge". As a result, the board has decided to take a prudent approach to the final dividend and withhold any special dividend until there is greater clarity over the full impact of Covid-19 on the company and the wider economy.

It proposed a final dividend of 8.1p, up from 6.8p the year before and in line with its dividend policy, and said it will defer the declaration of a special dividend. This takes the total dividend for 2019 to 12.8p, including the interim dividend of 4.7p already paid.

Chief executive officer Geoff Carter said: "Against the backdrop of on-going turbulent market conditions and industry headwinds, our commitment to underwriting profitability has helped Sabre to both deliver a robust performance in 2019 and, as importantly, ensured business is adequately priced to support profitability in future years. We have been assertive in covering high claim and other cost inflation, applying rate increases in excess of 10% during the year. This action has protected our profit margins and will continue as we move through 2020.

"Our modelling of COVID-19 scenarios does not suggest that we would undermine our capital base in any reasonably foreseeable stressed scenario and that we will continue to be profitable and capital generative. If more extreme scenarios were to occur these would be likely to reduce future years' profitability and dividends.

"The situation is, however, rapidly changing and unforeseen challenges and social and economic scenarios could occur."