Sabre Insurance cuts payout on half-year profit fall but says on track

Sabre Insurance Group PLC on Thursday slashed its interim dividend in line with a fall in profit, but it said its solvency coverage is strong and it expects a better second half.

The Dorking, Surrey-based motor insurance underwriter reported pretax profit of £4.8 million for the six months that ended June 30, down from £8.6 million a year before.

Gross written premium rose by 8.4% to £99.5 million from £91.8 million, but net earned premium declined by 7.4% to £71.8 million from £77.5 million.

What’s more, combined operating ratio rose to 93.8% from 92.7%. A ratio below 100% indicates a profit on underwriting, so the lower the better. Net loss ratio improved to 62.0% from 65.4%, but the expense ratio worsened to 93.8% from 92.7%.

Sabre said the expense ratio strain caused by low earned premium and one-off development costs is expected to improve in the second half. It guided combined operating ratio at the upper end of a range from 85% to 90% for all of 2023.

The company also said it expects gross written premium to be 15% to 20% ahead of 2022, when it was £171.3 million. It expects further growth in 2024.

‘I am pleased with the position we find ourselves in at the half year point, and believe our long-term strategy of disciplined pricing, early assertive corrective actions when required and a tight focus on emerging claims trends continues to prove its value,’ commented Chief Executive Officer Geoff Carter.

‘In a challenging year for the wider market, we continue to anticipate a strong result in our core motor vehicle book. The half-year results are in line with our expectations and support our full-year projections.’

Sabre cut its interim dividend to 0.9 pence per share from 2.8p a year ago, which it said was in line with its dividend policy.

Sabre shares were up 4.0% to 146.20 pence at midday in London on Thursday.

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