Net insurance claims in the first half of 2015 was up 18% to £86.8m in H1 2015
Hastings became the latest company to be hit by rising claims inflation as it revealed in its half year that claims experience had worsened.
The insurance and broking group’s accident year claims ratio, which excludes prior-year reserve movements, deteriorated by 2.2 percentage points to 77% in the first half of 2015 from 74.8% in the same period last year.
Hastings said this was caused by “moderate increases in claims inflation” and that the recent price increases it has put through have yet to fully show up in premium numbers.
Net insurance claims increased by 18% to £86.8m in the first half of 2015 (H1 2014: £73.4m).
Hastings attributed the rise in part to higher exposures because of higher policy numbers and in part to claims inflation because of an increase in accident frequency.
The company added that claims inflation had been offset by reserve releases, which shaved 3.4 percentage points from the loss ratio.
As a result, Hastings’s calendar year loss ratio, including reserve movements, was almost unchanged at 73.6% (H1 2014: 73.8%).
The group’s combined operating ratio improved by 0.4 percentage points to 90.0% for H1 2015, reflecting an improvement in the expense ratio and calendar year loss ratio.
Hastings is the latest insurer to report issues with claims inflation.
Esure reported earlier this month that it had been hit by increasing small personal injury claims costs.
Esure’s underlying profit before tax fell 21.3% to £46.5m for the first six months of this year, compared to £59.1m in the firsts six months of last year.