28th Mar 2019 08:38
LONDON (Alliance News) - Sabre Insurance Group PLC on Thursday reported a rise in annual profit and proposed a special dividend payment on improved capital.
The company also said that will continue to focus on prioritizing underwriting profitability over premium growth.
For 2018, the FTSE 250-listed car insurance company reported an 11% increase in pretax profit to GBP61.4 million from GBP55.5 million the year before.
Sabre's total income increased 1.6% in 2018 to GBP194.9 million from GBP191.8 million in 2017. The company's gross written premiums were flat in 2018 at GBP210.0 million, with net earned premiums rising slightly to GBP188.2 million.
Sabre's net loss ratio in 2018 increased to 48.5% from 46.5% the year before with the insurer's combined operating ratio worsening to 70.6% from 68.5%.
A ratio below 100% indicates that the company is making underwriting profit, while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums, so the lower the better.
Sabre's solvency coverage ratio increased to 213% in 2018 from 160% the year before. The company's preferred solvency capital range is 140% to 160%. Due to being "significantly" ahead of its target, Sabre is proposing a special dividend of 6.0 pence per share.
Together with a final dividend of 6.8p, Sabre's total dividend for 2018 is 20.0p. The company did not pay a dividend in 2017.
"I am pleased to report on our first full year as a listed business. Against the backdrop of what have been competitive underlying market conditions during the year, we have stuck to our core principle of focusing on underwriting profitability over volume growth. This has ensured that we maintained our market-leading underwriting performance, with a combined operating ratio better than our target, and continued to deliver strong organic capital generation," said Chief Executive Geoff Carter.
Looking ahead, the company said its remains "very confident" in the outlook for the company despite the "well publicised challenging dynamics and changes" of the UK private car insurance market.
The insurer noted the "most significant" development facing the company, and the insurance market as whole, is the UK Financial Conduct Authority review into pricing techniques in the market.
The review is focused on the differences between new business and renewal prices, and the use of behavioural, or non-risk, factors in determining pricing.
Sabre said it does not use either technique so believes it is primed to end up in a "neutral or slightly positive position relative to the market".
Shares in Sabre Insurance were down 1.4% early Thursday at 290.00 pence each.
Related Shares:
Sabre Insur