14th Jul 2022 10:18
(Alliance News) - Sabre Insurance Group PLC on Thursday reported profit in the first half of 2022 shrank, hit by inflation.
Sabre shares tumbled 33% to 126.20 pence each in London on Thursday morning.
Interim pretax profit slumped 81% to GBP4.3 million from GBP22.2 million a year ago.
While gross written premiums increased 17% to GBP91.8 million from GBP78.2 million, the net loss ratio widened to 72% from 45%, and the combined operating ratio rose to 99% from 74%. Any combined ratio below 100% indicates underwriting profit, so the lower the better.
In May, the firm said it expected the combined ratio to be around 80% for 2022.
Claims inflation has continued to increase through the first half, now standing at around 12%, said Sabre. "The increase in claims inflation applies across all of the key drivers of claims cost, including parts, labour, credit hire, paint, car values and availability, and provision of care," the firm said.
"Following analysis of the impact of the exceptionally rapid increase in underlying inflation to 30-year highs, Sabre is reflecting this through an appropriate adjustment to reserves," the company said.
Sabre still expects to pay a dividend for 2022, but one "at a reduced level", before returning to "more normal" levels in 2023.
The Surrey-based insurer said it expects to return to "near-normal profitability in 2023".
It added: "We continue to project top-line growth for the year supporting our business into 2023 onwards and expect growth to return to the motor book following a significant correction to motor insurance pricing, although the timing of this is uncertain."
By Tom Budszus; [email protected]
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