Sabre Insurance (SBRE) reinstated its deferred 2019 special dividend, while revealing a flat combined ratio (losses and expenses divided by premiums) of 72 per cent for the June half-year. An underwriting profit at the lower end of the target range would not normally be cause for celebration, but it represents a creditable outcome when you consider the prevailing uncertainty at the time of May’s trading update.
New business volumes had contracted significantly as the lockdown took hold, and there was no clarity on the impact on claim costs. However, June saw a swift turnaround, with a double-digit increase in premiums written, as the auto market started to splutter back into life. The insurer noted a marked increase in quotation requests, although we cannot be sure if the turnaround under way will eventually compensate for the fall in gross premiums through the first half.
Sabre's business nearly entered a state of suspended animation during lockdown. New business slowed appreciably, but the current year loss ratio pulled back due to a general reduction in motoring journeys. Reserve releases declined significantly, as management took a more conservative line on actuarial reserves for 2020.
Numis expects full-year adjusted EPS of 16.6p, rising to 17.5p in 2021.
| SABRE INSURANCE (SBRE) | ||||
| ORD PRICE: | 261p | MARKET VALUE: | £ 651m | |
| TOUCH: | 261-268p | 12-MONTH HIGH: | 340p | LOW: 200p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 109p* | SOLVENCY RATIO: | 178% | |
| Half-year to 30 June | Gross Premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 101 | 30.5 | 9.90 | 4.70 |
| 2020 † | 86.9 | 27.8 | 9.03 | 4.30 |
| % change | -14 | -9 | -9 | -9 |
| Ex-div: | 06 Aug | |||
| Payment: | 28 Aug | |||
| NB: Solvency ratio post-interim dividend payment. † Does not include deferred 2019 special dividend of 5.2p per share. *Includes intangible assets of £156m, or 62.5p a share | ||||
