Sabre Insurance upbeat on first half growth

Motor insurance underwriter Sabre Insurance Group reported a strong set of half-year results on Tuesday, with substantial year-on-year profit growth and healthy gross written premium levels at target margins.

The London-listed company reported a gross written premium of £125.7m for the six months ended 30 June, up from £99.5m in the first half of 2023.

Its net loss ratio improved to 57.3% from 62%, while the expense ratio decreased to 26.3% from 31.8%.

The combined operating ratio fell to 83.6%, compared to 93.8% last year.

Net profit margin surged to 18% from 8.3%, resulting in a profit before tax of £20.2m, up from £4.8m, and a profit after tax of £15.1m, compared to £3.8m.

The interim dividend per share increased to 1.7p from 0.9p, while the solvency coverage ratio pre-dividend stood at 191.9%, and post-dividend at 185.2%, up from 173% and 169%, respectively.

Sabre said its core motor vehicle portfolio achieved a balance between volume and profitability, adhering to the company's long-standing strategy of targeting profitability with volume as an outcome.

The motorcycle and taxi portfolios were meanwhile developing well, and contributed positively to the overall profitability.

Market conditions saw a slowdown in price increases after a correction in 2023, but claims inflation remained high and was expected to continue into 2025.

Sabre said it maintained its prudent approach to pricing and reserving, ensuring price changes fully covered claims inflation.

The firm said it continued to advance its strategic initiatives, including implementing “insurer-hosted pricing” to enhance pricing capabilities, expanding motorcycle distribution in early 2025, and improving the efficiency of direct operations.

Sabre reiterated its guidance for the full year, anticipating further growth in the core motor vehicle account and overall growth in gross written premium above claims inflation for 2024.

The combined operating ratio was expected to be between 75% and 80% on an IFRS 17 discounted basis, depending on the level of discounting credit recorded for the year.

Forward-looking claims inflation remained around 10%.

“We are in a strong position at the halfway point of the year, having written good levels of premium at our target margins across all product lines,” said chief executive officer Geoff Carter.

“This is clearly demonstrated by the positive numbers we are reporting today.

“We have been able to deploy price increases which reflect our view of claims inflation, and we look forward to a strong performance in the second-half of the year as the premium we have written to date earns-through.”

At 1140 BST, shares in Sabre Insurance Group were flat at 161p.

Reporting by Josh White for Sharecast.com.