In the first six months of 2019, Sabre Insurance (SBRE) sacrificed premium growth in order to protect margins, as cost inflation remained high. The non-prime motor insurer raised prices to reflect heightened claims, but with 80 per cent of business originated via brokers that came at a cost: a 7 per cent dip in gross written premiums.
Chief executive Geoff Carter said this result was slightly better than he expected, as stronger reserve releases contributed almost £15m to pre-tax profits. However, if current claims inflation of between 7 and 8 per cent persists, management expects premiums at the full year to be flat on the first half.
The combined operating ratio – that is, claims costs as a proportion of premium income – may have ticked up slightly at 71.5 per cent, but it remained within the target range. Management used these results to reiterate guidance for a slightly improved result at the full year.
Analysts at Peel Hunt expect adjusted net tangible assets of 45.5p a share at full-year results, up from 43.5p at the end of 2018.
SABRE INSURANCE (SBRE) | ||||
ORD PRICE: | 272.5p | MARKET VALUE: | £681m | |
TOUCH: | 272-273p | 12-MONTH HIGH: | 295p | LOW: 235p |
DIVIDEND YIELD: | 4.2%^ | PE RATIO: | 14 | |
NET ASSET VALUE: | 103p* | COMBINED RATIO: | 71.5% |
Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
2018 | 103 | 32.0 | -0.1 | 7.2 |
2019 | 102 | 30.5 | 1.7 | 4.7 |
% change | -1 | -5 | - | -35 |
Ex-div: | 22 Aug | |||
Payment: | 19 Sep | |||
^Excludes 2018 special dividend of 6p a share. *Includes intangible assets of £156m, or 62p a share |