LONDON (Alliance News) - Hastings Group Holdings PLC said Thursday it has delivered "another profitable" period as it chases its goal of three million customers but warned its loss ratio in 2018 will be at the "lower" end of its guided range.
Shares in the FTSE 250-listed technology-focused insurance provider were down 9.1% in midday trading at 200.40 pence each.
Hastings expects its loss ratio for the year ending December to be at the "lower" end of its target range of 75% to 79%, despite posting a 73.8% ratio at the half-year stage, better than the target.
An insurer calculates its loss ratio by dividing the total losses incurred from claims, plus adjustment expenses, by the total amount of premiums earned. The smaller the resulting figure the better for the insurer.
Hastings attributed its increasing loss ratio to claims inflation continuing to exceed to premiums inflation.
The insurer expects its loss ratio will trend towards the middle of its target in 2019.
In an effort to combat its loss ratio creeping upward towards 79%, Hastings said it will maintain its "disciplined" pricing strategy in a "competitive market" for the rest of the year.
The company is "confident" in the underlying momentum of the business and continues to work towards its target of three million live customer policies during 2019.
Hastings believes a combination of enhanced price comparison website pricing, additional anti-fraud capabilities and enhancing its direct and multi-car product offerings will help it reach the target.
The insurer formed a new home panel of home underwriters in 2018, which now includes Lloyds Bank General Insurance, part of Lloyds Banking Group PLC, Integra Insurance Solutions Ltd, and RSA Insurance Group PLC.
"We have 2.7 million customers, an increase of 4% from last year, which we achieved whilst remaining true to our pricing discipline and increasing premiums in a competitive market," said Toby van der Meer, chief executive officer.
For the nine months to the end of September, Hastings said net revenue rose by 6.7% to GBP574.1 million from GBP538.3 million for the same period a year before.
The insurer's gross written premiums grew by 3.4% to GBP738.5 million from GBP714.3 million.
Hastings said market conditions "remained competitive" in the third quarter with average market premiums falling. But, the insurer claimed it "maintained its commitment to underwriting discipline".
As a result, average written premium inflation was 2% in the first nine months of the year.
The company said its customer policy numbers were broadly flat in the third quarter. This was due to a combination of applying premium rate increases and the 0.5% growth in car customers being offset by a small reduction in home customers.
Hastings share of the UK private car insurance market was 7.5% at September, up from 7.3% at the end of December.
CEO van der Meer added: "We remain well positioned in a very large market with 31 million cars on the road, growing consumer adoption of digital channels and continued media and regulatory focus on consumer switching."
