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(Alliance News) - Sabre Insurance Group PLC on Thursday said gross written premiums were lower in the first nine months of 2019, and it is still guiding for a full-year decline.
Gross written premiums for the nine months to September 30 came in a GBP152.9 million, 6.0% below the GBP162.6 million figure posted a year before. As a result, gross written premiums for 2019 as a whole are expected to fall by 7% from 2018's figure of GBP210.0 million. This aligns, Sabre said, with its prior guidance and would suggest an outcome of GBP195.3 million.
The motor insurer said it is "focusing on underwriting profitability over premium growth" in a bid to maximise long-term profitability.
For 2019 as a whole, Sabre's combined ratio is expected to pull slightly ahead of the mid-70% target - having posted a 70.6% combined ratio in 2018. A ratio above 100% indicates that an insurer is making underwriting losses, while a ratio below 100% means it is making a profit, so the lower the better.
Sabre said it has been disciplined with its underwriting and kept control of claims management so at to mitigate the likely increase in claims inflation along with "other cost pressures".
Due to "strong organic capital generation", Sabre is said it could potentially pay "an attractive full year dividend". Its solvency coverage ratio on September 30 was 198% versus 195% the year before and exceeding its target of between 140% and 160%.
Chief Executive Geoff Carter said there has been "a period of significant change in the UK motor insurance sector" and is is still seeing "high levels of industry-wide claims inflation".
There are further costs pressures as well, including levies, possible "reinsurance price rises following the Ogden rate decision" and the potential for changes in company behaviour due to personal injury legal reform.
Carter said signs of market premium hikes from competitors mean that, while Sabre has accelerated price rises to cover costs and inflation, its volumes have not been "further negatively impacted".
"We note the recent FCA report on pricing in the insurance industry. Given Sabre's approach is to price policies on a consistent basis across our new and renewal portfolios we do not anticipate that the proposed remedies will have a detrimental impact on our business," said Carter.
"Our performance so far in this financial year has been in line with our expectations and we remain confident that we will deliver a combined ratio slightly below our long-term target and an attractive dividend for the full year, supported by our current solvency ratio of 198%, which is well above our target 140% to 160% range," he added.
By Anna Farley; annafarley@alliancenews.com
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