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(Alliance News) - Sabre Insurance Group PLC on Tuesday cut its dividend due to a sharp fall in interim profit, as it incurred higher costs through net insurance claims.
Shares were up 5.7% at 108.20 pence each on Tuesday morning in London.
The Surrey, England-based motor insurance provider recorded a pretax profit of GBP4.3 million in the first half of 2022, down 81% from GBP22.2 million the year before, as net insurance claim costs jumped 62% to GBP59.3 million from GBP36.5 million.
Gross written premiums grew 17% in the period to GBP91.8 million from GBP78.2 million the year before.
The company attributed this to its new motorcycle and taxi partnerships.
However, Sabre noted that the motor book lost volume, due to necessary rate increases implemented during the past six months to tackle inflation.
Sabre's combined ratio grew to 98.9% in the period from 74.4%. A combined ratio below 100% indicates a profit on insurance underwriting, so the lower the better.
Sabre declared an interim dividend of 2.8 pence, down 24% year-on-year from 3.7p a year prior.
Going forward, Sabre said it plans to focus on profitable growth.
"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," Chief Executive Geoff Carter said.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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