Sabre Insurance (SBRE) hit the ground running in its first full year since flotation, and made impressive progress in the highly competitive motor insurance business.
As expected, premium income was flat, and Sabre concentrated on addressing the effects of claims inflation of around 6 per cent by pushing premium rates higher. And while a little weaker than a year earlier, the combined operating ratio (of claims as a percentage of premium income) remained highly profitable at 70.6 per cent.
Crucially, Sabre has abstained from chasing new business, maintaining underwriting discipline and protecting margins. It also means that it retained a very strong capital position, with a solvency coverage ratio of 213 per cent, well ahead of its 140-160 per cent target range.
Sabre is also relatively unaffected by the Financial Conduct Authority review into dual pricing, essentially the difference in premium rates offered to new and existing customers, because it does not use this practice. Nor does it use behavioural factors such as pushing rates higher on customers deemed less likely to shop around.
Some progress was achieved in turning around 2017's negative investment return, with a £0.7m loss turned into a £0.8m profit in 2018.
Analysts at Numis are forecasting gross written premiums of £210.8m for 2019, rising to £223.1m in 2020.
| SABRE INSURANCE (SBRE) | ||||
| ORD PRICE: | 287p | MARKET VALUE: | £718m | |
| TOUCH: | 285-287p | 12-MONTH HIGH: | 301p | LOW: 235p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 359 | |
| NET ASSET VALUE: | 106p*** | COMBINED RATIO: | 70.6% | |
| Year to 31 Dec | Gross premiums (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
| 2014 | 149 | 48.0 | 2.2 | nil |
| 2015 | 180 | 40.7 | 0.9 | nil |
| 2016 | 197 | 63.4 | 3.5 | nil |
| 2017** | 203 | 55.5 | -0.7 | nil |
| 2018 | 209 | 61.4 | 0.8 | 14* |
| % change | +3 | +11 | - | - |
| Ex-div: | 25 Apr | |||
| Payment: | 30 May | |||
| *Not including special dividend of 6p a share **Sabre Insurance floated in December 2017 ***Includes intangible assets of £156m, or 62p a share | ||||
