Sabre Insurance confident as motor business meets forecasts

The London-listed firm said the increase in premium was accompanied by profitability that met expectations, and exceeded the results achieved during the same period last year.

For the motorcycle business, Sabre reported an improvement in profitability, although gross written premium fell to £6.3m from £12m year-on-year.

The company said motorcycle’s current performance was in line with expectations, and was expected to contribute positively to the company's profits for 2023.

Regarding taxi insurance, the firm said it had undertaken underwriting actions aimed at enhancing profitability.

The gross written premium for taxi insurance to £4.7m for the four months ended 30 April, up from £2.5m in the same period in 2022.

Total gross written premium stood at £58.9m for the period, compared to £59.8m a year earlier.

As at 30 April, the company’s total policy count stood at 275,000, down from the 304,000 policies it reported at the end of December.

The decrease was attributed to a decline in core motor policies, although Sabre reported a recent return to growth in policy count over recent weeks.

Sabre reported a post-dividend solvency capital ratio as of 31 March of 172%, up from 160% at the end of March last year.

Looking at market trends, claims inflation for 2023 was expected to remain at around 10%,, as previously predicted.

There was evidence of positive momentum in market pricing since late March, the board said, with that trend expected to continue in the upcoming months.

Sabre reiterated its full-year guidance, including high single-digit growth in overall gross written premium for the entire year.

However, it said growth in its core motor insurance business was expected to be somewhat offset by reductions in the motorcycle and taxi segments, due to ongoing underwriting actions.

The company expected the combined operating ratio to fall between 85% and 90%.

Although the expense ratio strain was expected in the first half, improvements in loss ratios throughout 2023 as a result of pricing actions were expected to lead to a lower combined operating ratio for the full year.

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

“In particular, we have been encouraged by the trends that we have been seeing from mid-March and into May.

“There is clear evidence that market pricing is improving, and we have seen weekly gross written premiums across this period in our core motor business over 20% higher than the same time last year.”

Carter said the company expected the trend of improving market pricing would continue, although it remained too early to tell what the pace and trajectory of improvement would be, as it remained confident in its ability to continue to grow volumes at an appropriate margin.

“We are currently in the fortunate position of making pricing decisions designed to find an optimal point between volume growth and margin enhancement.

“We expect the loss ratios in the core motor business to improve through the rest of 2023, with pricing actions reflecting ongoing inflation.

“Volumes for the taxi business have been suppressed while this market segment remains challenging.”

The actions taken last year and this year to increase the profitability of the motorcycle businesses should generate a positive contribution to profit, Geoff Carter added.

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

At 1052 BST, shares in Sabre Insurance Group were up 1.45% at 125.8p.

Reporting by Josh White for Sharecast.com.