Sabre Insurance Group plc (the "Group" or "Sabre"), one of the UK's leading motor insurance underwriters, reports its half-year results for the six months ended 30 June 2024.

KEY HIGHLIGHTS

-    Strong year-on-year profit growth

-    Healthy gross written premium levels being written at target margins

-    Loss ratio significantly better than H1 2023

-    Continued organic capital generation and strong solvency position

-    Good progress across our key strategic initiatives, which will support planned growth in profit and volume in future periods

Geoff Carter, Chief Executive Officer of Sabre, commented:

"We are in a strong position at the halfway point of the year, having written good levels of premium at our target margins across all product lines. This is clearly demonstrated by the positive numbers we are reporting today. We have been able to deploy price increases which reflect our view of claims inflation, and we look forward to a strong performance in the second-half of the year as the premium we have written to date earns-through."

SUMMARY OF RESULTS

Current trading

-    On core Motor Vehicle, we have established a position where we are able to balance the delivery of volume and profitability

-    We are continuing to follow our long-established strategy of profitability being a target, and volume the output

-    Motorcycle and Taxi portfolios are developing well and we consider these products provide a valuable complement to our core Motor Vehicle portfolio with good underlying profitability

-    Continued strong solvency position, reflecting our robust underwriting performance, which continues to generate capital

Market trends

-    Following the necessary market pricing correction which drove price increases in 2023, there is evidence of an anticipated slowing-down of market-wide price increases in the first half of this year

-    Claims inflation has continued at relatively high levels in 2024, and this is expected to continue into 2025

-    Further market-wide rate increases are required this year to meet the inflating cost of claims

-    We have maintained our usual prudent approach to pricing and reserving, fully covering claims inflation through price changes

Legal and regulatory environment

-    We note the new government's comments around the need to ensure competitive and transparent pricing in motor insurance

-    Our consistent target margin approach across all customer segments and lack of dependency on income from ancillary products positions Sabre well in this environment

-    We believe that the UK motor insurance market delivers value for consumers through price transparency, a highly competitive market and a wide choice of products, whilst reflecting the underlying cost of claims

Strategic initiatives

-    We have continued to make solid progress with key strategic initiatives:

‒       Putting in place "insurer hosted pricing", which will provide the infrastructure for further evolving our pricing capabilities

‒       On track to expand our Motorcycle distribution in early 2025

‒       Enhancing the efficiency of our direct operations

Outlook

-    Guidance reiterated for the full-year:

‒       Anticipate further growth in the core Motor Vehicle account with overall growth in GWP above claims inflation across 2024

‒       Overall COR of 75% to 80% on an IFRS 17 (discounted) basis, dependent on the level of discounting credit recorded for the year

-    Forward-looking claims inflation continues at circa 10%

There will be a call for analysts and investors at 0930hrs on Tuesday, 30 July 2024. For details, please contact sabre@teneo.com or find the registration link here: Results Presentation

ENQUIRIES

Sabre Insurance Group                                                       0330 024 4696

Geoff Carter, Chief Executive Officer  

Adam Westwood, Chief Financial Officer          

Teneo                                                                                     020 7260 2700

James Macey White/Ffion Dash                                          sabre@teneo.com   

DIVIDEND CALENDAR

2024 Interim Dividend Payment Dates

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

The significant improvement in top-line and profitability in the first half of 2024 is a clear demonstration of Sabre's strategy, which has allowed the Group to leverage favourable market conditions to generate profitable growth in the latter half of 2023 and into 2024, which has earned through in 2024. Whilst gross written premium is up by 26.3%, showing continued momentum in the Group's growth, a key factor in the c.4x increase in profit before tax is the 41.6% increase in insurance revenue, which is equivalent to gross earned premium plus income from instalment interest.

The increase in insurance revenue has generated an improvement in operating expense leverage, with a significant 5.5ppt reduction in expense ratio.

Net loss ratio has also improved since H1 2023, as more profitable business earns through - H1 2023 was still being impacted by the inflation shock in 2022. Overall, all products have performed in-line with expectation, and a discounted combined operating ratio of 83.6% keeps the Group on track to meet its guidance of a full-year discounted combined operating ratio within the target 75% to 80% range, dependent on the level of discounting credit achieved.

The Group's solvency coverage ratio, both pre- and post-dividend remains very strong, with capital having been generated during the period due to profitable underwriting set against the Group's capital efficient operating model. The Group's policy is to address the capital position annually once the full-year underwriting result is certain and distribute excess capital primarily by way of a special dividend following the year-end results.

The Group continues to hold no external debt. All of the Group's capital is considered 'Tier 1' under Solvency II. The Directors continue to hold the view that this currently allows the greatest operational flexibility for the Group.