31st Jul 2018 11:58
LONDON (Alliance News) - Sabre Insurance Group PLC said Tuesday its combined operating ratio decreased in the first half with gross written premiums flat.
In the six months ended June, Sabre Insurance decreased its combined operating ratio to 68.61% from 71.65%, with gross written premiums largely flat at GBP108.8 million from GBP109.1 million the year before.
The company said its focus was on maintaining a focus on combined operating ratio over growth - and traded well in "relatively weak market conditions". The lower an insurance company's combined operating ratio the more profitable its underwriting.
Sabre Insurance believes its combined operating ratio "reflects strong profitability". A financial year loss ratio of 45.73%, down from 49.59%, was achieved with a current-year loss ratio of 59.00%, down from 60.74%.
The company's pretax profit increased 14% in the first half to GBP32.0 million from GBP28.0 million.
In line with policy set out at its IPO, Sabre Insurance is proposing a dividend representing 70% of its half-year profit after tax, resulting in an interim dividend of 7.2 pence per share
Looking ahead, the company expects its full-year gross written premiums to continue matching 2017.
Sabre Insurance expects to maintain its current underwriting margins and deliver a financial year combined operating ratio better than its mid-70% target - slightly ahead of 2017.
Chief Executive Officer Geoff Carter said: "I am pleased to present our first half-year report since our IPO last December. Sabre's core principle to focus on underwriting profitability over volume has allowed the group to protect its combined operating ratio throughout the first half of the year, despite some downward pressure on pricing.
"Having realigned our prices to reflect the current claims environment, without speculating on any future benefits, we believe claims inflation will persist from this new baseline. We expect to cover this through price increases in the second half of 2018, maintaining our core, disciplined focus on underwriting profitability and continuing to treat volume as an output and not a target. We continue to investigate new rating factors in order to maintain our competitive advantage, and work with potential new distribution partners to ensure we achieve the best possible level of market coverage.
"The group's profitability has allowed us to build significant regulatory capital. Excluding the capital required to fund the dividend, the group's Solvency capital ratio is at 179%, which provides the board the option to return surplus capital to shareholders through a special dividend at the full-year, should the capital position improve further as expected throughout the remainder of 2018."
Shares in Sabre Insurance were up 1.8% Tuesday at 278.00 pence each.
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