25th Oct 2019 08:50
(Alliance News) - Hastings Group Holdings PLC on Friday said its gross written premiums in the first nine months of 2019 are up on the prior year but warned of an unsure outlook.
Shares in Hastings were 3.6% lower in London in morning trade at 181.50 pence each.
In the nine months to September 30, the car and home insurer recorded GBP753.1 million in gross written premiums, up 2.0% on the year before.
"The increase in premium prices have been offset by a change in the risk mix of business that is aimed at lower risk segments and a reduction in younger drivers," Hastings said.
As a result, the insurer said it has continued to prioritise pricing discipline in the third quarter. Hastings said it applied rates in line with first half claims inflation but was ahead of the market.
"The market has remained competitive, with market premiums continuing to lag claims inflation, and the group's new business competitiveness has therefore fallen," Hastings added.
Claims inflation in the third quarter "elevated" to sit between 7% to 8%, Hastings said. Inflation was experienced across third party credit hire cost, repair costs and mid-range bodily injury costs, the insurer said.
Hastings' calendar year loss ratio at September 30 stood at 79.1%, flat on the previous quarter, and at the top of its targeted range.
In the nine months to September 30, net revenue is down 1.8% year-on-year to GBP563.8 million, with Hastings blaming lower earned premiums and lower reinsurance commissions for the slip.
The insurer's live customer policies rose 5.2% year-on-year, however, ending September 30 at 2.8 million, which Hastings said was driven by strong retention rates. The insurer's UK private car market share increased to 7.8% from 7.5%.
Chief Executive Toby van der Meer said: "I am pleased with the progress the group continues to make on its strategic initiatives and digital investments. We have successfully transitioned to our new repair partners to benefit customers, while the ongoing digitalisation of the business has been continued by the increasing popularity of our mobile app, with 430,000 downloads since its launch."
Looking ahead, Hastings said it will continue to monitor claims trends and apply price increases to meet its 75% to 79% loss ratio target range.
"The full year loss ratio outlook will however be dependent upon claims experience during the fourth quarter and the loss ratio, before the impact of the Ogden rate change, could move from the top of the target range to slightly above should elevated claims inflation continue," the insurer added.
Van der Meer added: "We are confident that continuing to invest in our growth opportunities whilst navigating these current market conditions is the right thing to do."
By Paul McGowan; [email protected]
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